By on May 28, 2019

2019 Mitsubishi Eclipse Cross front quarter

The man who once helped outfit Mitsubishi’s lone American assembly plant will soon head the company he joined back in 1984. He also wonders what can be done about the brand’s existence in the United States.

Takao Kato, 57, steps into the shoes of outgoing CEO Osamu Masuko on June 21st — a move that comes as the automaker’s membership in the Renault-Nissan Alliance faces uncertainty in light of merger overtures from Fiat Chrysler. In a news conference held before the merger news, Kato mused about the company’s limited presence in North America, promising changes ahead.

In remarks reported by Automotive News, Kato said the company’s operations in the region will require a realignment.

“It’s not easy to be in that market,” Kato said. “If you are a big-scale OEM, of course you will be able to secure a profit. But will that be appropriate for us too, at MMC?”

Kato allowed that question to remain unanswered. The incoming CEO said Mitsubishi’s North American operation needs to more closely align with the company’s “small but beautiful” product strategy, without giving details about potential model changes. It’s known that a replacement for the aging Outlander Sport won’t be along for another couple of years, and the same goes for the larger Outlander.

Mitsubishi fields just four models in the region, one of which (Outlander Sport) competes in the same space as the similarly compact Eclipse Cross. At the bottom of the lineup is the subcompact, three-cylinder Mirage. Despite being on the brink of death just a few years ago, Mitsubishi’s sales have climbed significantly since then, helped along by an expanding dealer network. Last year’s U.S. sales volume was the brand’s highest since 2007.

Still, with limited product and volume that’s less than half of what Mazda sells in a year, the question of whether Mitsubishi will remain in the region is a valid one. When asked, Kato offered tepid reassurance to brand loyalists.

“Sales are being continued. North America is one of the biggest markets. Therefore, exiting from the sales market would probably not be an option,” he said.

While not insignificant, sales in the U.S. pale compared to those seen in China and Indonesia, the brand’s two biggest markets. A midterm business plan will emerge later this year.

[Image: Chris Tonn/TTAC]

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18 Comments on “Incoming Mitsubishi CEO Concerned About Brand’s U.S. Presence...”

  • avatar
    SCE to AUX

    “…with limited product and volume that’s less than half of what Mazda sells in a year,”

    True, but Mazda is perennially stuck at just under 2% market share, while Mitsubishi has been on an upward trajectory for several years. The company is even bold enough to offer a 10/100 warranty.

    Mazda products get great reviews by journalists, but they never gain market share; Mitsubishi products get terrible reviews, yet more and more consumers buy them.

    Mitsubishi can win by differentiating its products from the competitors. They won’t out-Camry Toyota, but offering a few interesting, unique products (like the goofy Mirage) could keep things moving.

    As for profitability, are their 20% discounts off MSRP a marketing gimmick, or a sign of desperation?

    • 0 avatar

      You make some good points. Mazda has been consistent with a near 2% market share and increased ASP. Mitsu on the other hand have yo-yo’ed all over the place and are firmly bottom tier in customers and product quality.
      Mitsu has come back into the market because cars have got too expensive for average people so a Mirage makes some sense for those who WANT new but also want to spend around $10k.

      • 0 avatar

        Yep. Mitsubishi quality and product line are mediocre, but they offer a lot of people an entry point into a new vehicle with a nice warranty. I see a ton of Mitsubishi products here in DFW, including the Mirage, which makes almost zero sense in a land of 75mph roads. But it’s simply the cheapest option if you are scared of driving around someone else’s throwaway.

    • 0 avatar
      Peter Gazis

      SCE to AUX

      Double nothing is still nothing.

      Any future product Mitsubishi has in mind will sell 10 times better wearing a Nissan badge. Can’ t move the brand upscale. Nissan already has Infiniti as an entry level luxury brand.
      The Mitsubishi brand has Zero equity

  • avatar

    I don’t understand why Mitsubishi gave up the market for high-performance vehicles like the Lancer Evolution and its predecessors. Turbo, all-wheel drive, 300 hp.

    It’s a niche market, but considering the sticker prices, there was probably money to be made there, not to mention street cred. I imagine most of the owners beat those cars hard, so maybe the warranty claims killed it.

    It would also be neat if they stuck the Evo engine in one of their CUVs.

    • 0 avatar

      Warranty claims, repos, inability to lease at competitive rates with similarly priced options, limited market, car no longer relevant anywhere else to amortize costs… There is no more Lancer Evo, not just no more federalized version. They were once homologation specials for the popular WRC and sold in some numbers in lots of markets. The WRC cars haven’t been meaningfully related to road cars for many years, so there is no longer a reason to develop production cars or a way to market based on competition success. Don’t be too surprised when Subaru follows suit. STIs get traded in or forfeited when the front brakes wear out and the first-job-out-of-college debtors who buy them can’t swing $3K to have the Brembos replaced.

    • 0 avatar

      “I don’t understand why Mitsubishi gave up the market for high-performance vehicles like the Lancer Evolution and its predecessors. Turbo, all-wheel drive, 300 hp.”

      because they don’t make any money. cars like that need to be based on a mainstream model to actually pay the bills with volume, and nobody wants Lancers.

    • 0 avatar

      I saw a 2nd gen Eclipse Spyder in traffic yesterday, classic fart-can exhaust, popping a blow off valve off… a nostalgic thing to see. They really used to make some cool desirable stuff.

  • avatar

    I purchased a couple of Mitsubishi products (an ’86 Dodge Vista 4WD wagon and a’92 Expo SP) new and they were both excellent vehicles – my now ex-wife ran the ’92 to 230k miles without issue. Solidly built, reliable, but not really thrifty (could only manage around 23mpg highway with the ’92). They were SUV’s before the current crop of SUV’s and held seven people comfortably and performed very decently. Mitsubishi sold a ton of these things in the mid-’80s to the early ’90s under the names Mitsubishi, Dodge and Eagle. Somewhere Mitsubishi lost their way between my ’92 and today. This guy Takao Kato, having been around since ’86, should remember what worked back then to help fix them in today’s market.

    • 0 avatar
      Arthur Dailey

      Incredibly on May 24th 2019, in the GTA I pulled up behind a red light, directly behind a functioning Dodge Vista 4wd wagon. Looked like it was being used by a contractor as it through the back window I could see a step ladder and what looked like a large number of paint cans.

  • avatar

    I see quite a bit of Mitsubishi product in my area, many Mirages (Sedans and hatchbacks) in the poorer black/Hispanic area. Fittingly, there is a Mitsubishi dealer right in the area, with a buy-here-pay-here used lot as part of the operation.

    There’s still a surprising number of Lancers around too, despite the ample abuse that gets doled out to them by many hapless owners, they hold up well mechanically, even with the CVT.

    • 0 avatar

      When my ex and I lived in Orange city Florida, there were Mirages EVERYWHERE. They really sound like a tired old beater when taking off from a stop. I cant see myself choosing one over a used Accord or something like that.

      When considering buying something to use for Uber (before I went back to work), I thought of a Mirage because I could get a new one with full warranty, and it cant be *that* bad.

      Well, I discovered that it is indeed that damn bad. The idea was quickly snuffed out when I saw how horribly cheap and uncomfortable they are inside, plus the fact that I could get a far roomier (and more refined) base model Kia Soul with a manual for about $1500-2k more. Seriously, the seats in the Mirage have no contour to them whatsoever. It’s like some plywood with foam and mouse fur glued to it. My potential uber customers would have all given me a bad rating just because of how awful the car itself was. I’d seriously rather drive a 1994 Cutlass Ciera than a new Mirage with a CVT.

      • 0 avatar

        Nothing like some classic A-body with that sweet 3.1L torque and raspy exhaust note.

        • 0 avatar

          You’re right. I may have been unfair to the Olds lol.

        • 0 avatar

          Well described TCragg. Raspy 60-deg V6, floaty ride that lifts the nose when that 3.2L torque comes on surprisingly strong, and those nice velour seats with metal buckles. I’d unironically pick a well kept A-body over a lot of much newer cars.

          • 0 avatar

            As a former Celebrity owner, I can testify. Mine had the 2.8 MPFI V6. I also was fortunate to have a lot of seat time in my grandmother’s ’85 Ciera. Down on power compared to the ’94, but plush and comfortable.

  • avatar

    Nothing a new Montero wouldn’t fix…

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