For all of Mitsubishi Motors Corp.’s woes, the automaker’s dealers here are keeping their grousing to a minimum.
So far, dealers in Orange County say they like what they see of Cypress-based Mitsubishi Motors North America Inc.’s turnaround plan. The automaker is looking to new models and marketing to stem slumping sales in the next two years.
“But of course, we want it yesterday,” said Rasool Rastgoo, chief executive of California Auto Dealer Corp., which owns Mitsubishi dealers in Anaheim, Tustin and Puente Hills.
“The plan is to rebuild the franchise, basically, car by car,” said Jim Mulvaney, general manager of Huntington Beach Mitsubishi.
The rebound bid lies in getting customers into showrooms, according to Mulvaney.
“We’ve got to tell people to at least give us a shot,” he said. “We need to get the message out more.”
Mitsubishi’s plan is to drive buyers to dealers with a steady flow of new, stylish vehicles.
“Our top priority is making the dealers more profitable,” Mitsubishi spokesman Dan Irvin said.
The first of the new models,the sleek 2006 Eclipse sport coupe,already is in showrooms.
“They did right,” Mulvaney said. “Looks good.”
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Raider: first truck in 15 years |
To car buyers, looks are what is important, Mulvaney said. The Huntington Beach dealer already has sold out a couple of Eclipse shipments, he said.
Next up: the Raider Truck. The October debut is set to mark the first time in 15 years that dealers have had a truck to sell.
10,000 Mark
The Eclipse helped push Mitsubishi’s U.S. July sales to 10,376 vehicles, the first time the automaker has sold more than 10,000 cars since last August.
But Mitsubishi still is far from the 20,000 vehicles it was selling a month in early 2004. Part of the decline stems from the automaker’s move to cut some fleet sales. The rest is buyers turning away from Mitsubishi.
Mitsubishi’s problems began at home in Tokyo a few years ago, when the automaker tried to cover up defects instead of doing recalls.
Then in 2003, Mitsubishi began its slide here. Years of heady growth came to a halt when the automaker was hit by a wave of bad loans tied to a financing program that offered zero money down and zero interest on principal payments for a year. Young buyers flocked to the deal.
Mitsubishi saw another setback when Finbarr O’Neill, expected to turn around Mitsubishi like he did Fountain Valley-based Hyundai Motor America Inc., quit in January after about 16 months on the job. Dealers weren’t happy about that, saying it put the company behind another six months.
“Unfortunately, Finbarr bailed on us a little early,” Mulvaney said.
Rich Gilligan, Mitsubishi’s former North American manufacturing president, took over as chief executive in February. Dealers said Gilligan’s spent a lot of time reassuring them.
“He’s listening,” said Rastgoo, who dined with Gilligan.
Dealers just want the new cars to keep coming, Rastgoo said.
“It’s just like owning a shoe store,” he said.
OC’s five Mitsubishi dealers have borne the brunt of the automaker’s sales slide. Mitsubishi’s May sales in its own backyard were down 42.5% from a year earlier, while across North America they declined 23.4%.
For the year through May, sales in OC were off 38%, compared to 32% across the country and Canada.
Mitsubishi has 570 dealers in the U.S. and about 50 in Canada.
‘Meeting Goals’
Things are getting better, according to Mulvaney.
“We’re meeting the goals that were set,” he said. “We’re doing pretty good.”
Within the next two years, Mitsubishi plans to debut six models, according to company spokesman Irvin. Following the Raider truck is the Eclipse Spyder convertible in spring. In 2007, Mitsubishi plans to launch the Lancer Evolution X and the Lancer sedan.
“That’s the name of the game in this business,” Irvin said, “fresh, new exciting product.”
Marketing and advertising are part of the push. Mitsubishi has enlisted Omnicom Group Inc.’s BBDO Worldwide of New York to develop ads that emphasize “J Cool”,Japanese cool. Think “Lost in Translation” and “Kill Bill.” “Thrilling” is the campaign’s tag word.
“Kill Bill” “is quintessential J Cool,” Irvin said. “There’s a real trend toward things Asian.”
Dealers have little money for advertising and depend on Mitsubishi, Mulvaney said.
“We’ve been following their lead,” he said. “Their lead has been pretty good this summer.”
Dealers have suggested to Mitsubishi that the automaker give dealer incentives to buyers as a rebate, Mulvaney said.
“They’re going to start doing that,” he said.
The incentive packages are evaluated each month, Mitsubishi’s Irvin said.
Dealers also are offering better financing under a pact Mitsubishi struck with Merrill Lynch & Co. late last year, Irvin said.
If dealers seem patient, it could be because they don’t have much choice.
They can quit their franchisees any time, according to Mulvaney.
“They’ll pick up the cars, pick up the parts and shake your hand,” he said.
But starting another franchise could take two to three years. By that time, Mitsubishi could be viable again.
“You’d have to be out of your mind to give your franchise back,” Rastgoo said. “We’re very excited about the future of Mitsubishi.”
