Opinion: The Mitsubishi Motors Recovery Plan

By Michael Banovsky
Photos Courtesy Mitsubishi Motors

Despite the fact that Mitsubishi’s sales plunged about 37 per cent in the U.S. for 2004 – which means dealers in North America are finding difficult to shift product – there are a few bright spots in the lineup…globally, that is. And although Canadian sales are up slightly, Mitsubishi Canada's marketing strategies are directly tied to the U.S. Besides, plummeting sales in the U.S. will never be offset by strong Canadian sales. Not by a long shot.

I understand selling cars is difficult when your executives work in revolving doors –in-out, in-out – and that building brand awareness is difficult when your products are mostly bland, but there are only a few ways to gain back market share in the current market.

1) Go high – Offer high-spec luxo barges like the Diamante and offer top-spec sports cars like the Eclipse (like the 2004 Eclipse Convertible, which topped out at close to $43,000). This strategy won’t work. The current market is too dependent on gas prices, and without a solid marketing gimmick (i.e. HEMI), customers won’t be able to justify buying a thirsty V6 or V8 – á la the new Raider pickup truck. Mitsubishi’s top-spec model should be the four-cylinder Eclipse – with an optional Ralliart supercharger (for someone who wants the power) at the high-end. No V6s!

2) Go low – Mitsubishi has three awesome products for sale in various countries that would make excellent candidates for Canada. They are (drum roll please): The L200 pickup truck, the Colt supermini, and the Space Star.

The L200



Offered as either a regular, extended, or crew cab, the L200 would have only one competitor in its market segment: the Ford Ranger. If it was priced well, the L200 could compete for customers that need a real “small truck”, in a segment (the truck segment) that has grown substantially in recent years.

It would appeal primarily to rural types that need a tough truck – and also to people that don’t have the space to justify buying a big truck. Bringing over the diesel version would mean at least 10,000 annual sales in Canada.

The Colt



The Colt is an award-winning car, developed in the middle of a huge financial crisis. It would compete directly with the Toyota Echo Hatchback, Hyundai Accent, Kia Rio, and Honda Civic. The Colt would appeal to first-time car buyers, and people that want a small diesel car for city driving.

The small car market in Canada is booming right now, yet most “small” cars (Corolla, Civic, Golf, Sentra, etc.) have grown substantially. The diesel model would offer fuel economy on par with the Smart CityCoupe, but with much better performance. Then there’s the Colt CZT…

The Space Star



The Mazda5 is the first of the new-wave small wagons (the Mercedes-Benz B-Class is another) that will invade this country. If Mitsubishi offers the Space Star, it should figure on at least 40,000 units annually – making it its best seller. Again, with fuel at a premium and an aging population, many people don’t need the space of a full-sized minivan.

3) Offer competitive pricing – Can the new warranty. A 10-year, 160,000km warranty sounds good now, but the legacy costs will be astronomical. Ford, GM, and Chrysler are finding out the hard way right now that pensions are costing them an arm and a leg. A crazy warranty is the same. Offer a solid warranty; that’s it. Can incentives, and use Saturn’s no-haggle pricing policy. After a few years, the residual values will increase to make lease rates and finance rates attractive. Incentives only hurt residuals anyway…so can them, and your cars will be worth more in the long run.

Conclusion – Mitsubishi is Japan’s oldest automaker, and is a company rooted in engineering. Believe me: they can engineer great cars. Well, they do engineer great cars. But selling vehicles to North American tastes is getting a little bit old now…and the bigger ones are hurting owners with fuel costs. There are many Canadians that just want an honest-to-goodness car or truck. That is Mitsubishi’s market, the one all but abandoned by other carmakers.