Cypress-based Mitsubishi Motors North America Inc. has started a marketing campaign for fuel-efficient vehicles it hopes still will resonate after a dramatic fall in gas prices.
The automaker started television advertising in November, followed closely by radio and Web advertising for what it calls its “Phenomenal Four”,the Lancer and Galant sedans, the Eclipse coupe and the Outlander crossover sports utility vehicle.
The ads tout the cars’ fuel-efficiency, even as gas prices have dropped across the nation.
Sales of smaller, fuel-efficient cars have held up better than their larger, luxury counterparts in Orange County this year, one of the worst for automakers in recent memory.
But Mitsubishi still saw its vehicle sales fall 36% November versus a year earlier. For the year through November, Mitsubishi sold 87,591 vehicles, down 31%.
“The floor has fallen out so quickly and continued to erode at such a frightening pace that it’s hard to make plans that stay consistent from month to month,” said Maurice Durand, product public relations manager. “We’re about in line with what’s going on with everybody else in the automotive industry.”
The downturn comes just as Mitsubishi, part of Japan’s Mitsubishi Motors Corp., was getting back on its feet again.
In 2004, the automaker got hammered by bad auto loans by offering easy credit to younger buyers, some of them not entirely creditworthy. Sales plummeted.
The company since has tightened standards, focusing on more mature drivers and families. Mitsubishi finances about $1 billion worth of auto loans a year. Mitsubishi’s sales started growing again in 2007.
Now the overall falloff in consumer spending has hampered sales, pushing the auto maker to make cost-cutting decisions and prompting the latest advertising campaign.
Mitsubishi and other automakers have been cutting jobs and production, as the economic slowdown and weak consumer confidence has hurt demand. Last month, Mitsubishi said it is laying off 1,100 workers, including one-third of its temporary workers in Japan.
The company also plans to stop production at its Illinois plant for seven weeks starting in February, hoping to cut production by 110,000 vehicles by March 31.
Shinichi Kurihara, incoming president and chief executive for Mitsubishi’s North America operations, will inherit these measures from the outgoing Hiroshi Harunari when he takes the reins on Jan. 1.
Kurihara now is a senior executive in product strategy and brand development in Japan. He has had various assignments within the North American operations, including serving as the senior vice president of product strategy in 2001.
He also will oversee the Phenomenal Four campaign, which was intended to capitalize on the $4 a gallon gas prices that gripped much of the nation this summer by appealing to buyers who wanted to spend less every day.
But the timing of the campaign missed the high gas price window and hit an audience that wants to spend nothing.
“We felt it was right on message,” Durand said, “but it came out during a time when things changed again on us.”
The campaign was created by the company’s new advertising agency, Hollywood-based Traffic, which it hired in June.
Traffic was brought on after a review in March replaced the automaker’s previous agency, BBDO West, part of New York-based Omnicom Group Inc., which chose not to participate in the review process.
Mitsubishi spent about $155 million on U.S. media in 2007, according to TNS Media Intelligence. Like other automakers, it is looking to spend less in 2009.
“I can’t see us trying to spend our way out of this marketing situation,” Durand said. “But we’re looking at other ways to build awareness.”
The automaker may get more aggressive on the Internet, as well as cater to its existing clients.
“We have a strong enthusiast following, and playing to our zealot in a lot of ways is just one tactic to keep our message out there,” Durand said. “It’s not about driving the message home once,it’s about driving it home a thousand times.”
