Little-known electric i remains a low-key EV
With few ads, Mitsubishi model notches just 295 sales
LOS ANGELES -- Quick, name the newest electric vehicle from a mainstream automaker to hit the U.S. market.
If you're scratching your head, you're not alone. Aside from dealers and EV enthusiasts, few are paying attention to the Mitsubishi i, the newest and cheapest U.S. EV from an established automaker.
More than 16,000 consumers in Europe and Japan have bought an i since its 2009 global sales launch. But it's a different story stateside, where the egg-shaped minicar debuted late last year with barely a murmur. Even in green-friendly Los Angeles, one of the first markets to sell the i, the vehicle has been all but invisible, on the streets and in media.
"It's kind of been the invisible launch," said a West Coast Mitsubishi dealer who requested anonymity. "The car is very good, make no mistake about it. But there's very little marketing support. Customers just don't really know about it."
As a result, Mitsubishi has sold just 295 units of the i through April. Sales began in November.
That's far short of the 2,000 that Mitsubishi Motors Corp. officials in Japan had hoped to sell in the United States by now. Mitsubishi has since cut its U.S. sales goal.
Mitsubishi's small size and marketing budget limit what it can do to promote the car.
Dealer margins on i sales are slim, and with a base price of $29,975, before a $7,500 federal tax credit, Mitsubishi loses money on every i sold here. Advertising has been scant, and a beefed-up effort this quarter will shun a big-budget TV campaign for print and digital ads.
Initial sales goals set by the company's global EV business office were "very aggressive," Masatoshi Hasegawa, executive vice president of electric vehicle operations for Mitsubishi Motors North America, said in an interview.
Hasegawa said the company now hopes to sell 2,200 to 2,400 units in its current fiscal year, which ends March 31, 2013. That's down from its original U.S. goal, which Hasegawa declined to disclose.
Slower-than-expected deployment of EV charging infrastructure in most U.S. markets has slowed i sales, Hasegawa said. American consumers have also been slow to adopt alternative powertrain vehicles in general, he said.
"The U.S. market is hesitating on this kind of new technology," Hasegawa said. "Taking these circumstances into account, we need to readjust our speed of deployment in the market."
Hasegawa: Goal is 2,200-2,400 sales this fiscal year.
The quiet launch has meant sales and awareness of the vehicle have been confined largely to EV enthusiasts.
According to data from market research company Compete Inc., the i attracted about 4,700 in-market online shoppers in April, its best month so far. The Nissan Leaf averaged at least 10,000 monthly shoppers for most of the last year before dipping to a low of about 8,000 in April, said Dennis Bulgarelli, director of Compete's automotive practice.
Nissan sold 3,729 Leafs in the same six-month period in which Mitsubishi sold 295 units of the i. In the Leaf's first six months on the market, Nissan sold 2,186.
"Nissan had a lot of advertising support behind the Leaf and for electric vehicles and technologies in general," Bulgarelli said.
Aaron Bragman, an analyst with IHS Automotive, said Mitsubishi suffers from its relatively small size in the United States, complicating the already challenging task of selling EVs.
But, he added, "I'm not sure there is a big huge launch or rollout strategy for the i, other than bringing it to market and seeing how it'll do."
Scott Grove, a Mitsubishi dealer with two stores in the Chicago suburbs and chairman of the brand's national dealer council, said the i's low profile and slow early sales reflect the overall slow sales of EVs in general.
Grove, who has sold 11 units of the i so far, said the vehicle's greatest value is as a halo product, highlighting the technological capability of Mitsubishi. Said Grove: "This halo product doesn't need to be a volume thing. It just needs to be known and revered."
Sales of the i have grown slightly since December, but the company has yet to sell more than 100 units in a single month.
The low early results were caused in part by Mitsubishi's phased launch of the EV, Hasegawa said.
Sales began late last year in Oregon, California, Washington and Hawaii. Nine other states began sales in March. The i now is on sale in all states except Alaska, Wyoming, Idaho, Montana, Nebraska and North Dakota. By the end of June, roughly 300 of Mitsubishi's 400 dealers will be certified to sell the car.
But even in some West Coast markets that have been selling the i the longest, sales have been sluggish. The West Coast dealer who asked not to be identified, whose dealership is in one of the most EV-friendly markets in the country, said the dealership has sold just one i in the last three months.
"Most dealers that I'm aware of have passed on several order cycles of i cars because we have them in stock and they're not selling," the dealer said. "I'm not real clear on the marketing strategy for the i."
Mitsubishi began the i rollout in April 2011 with an online site. Customers placed about 400 advance orders, but about 45 percent were canceled after retail sales began, Hasegawa said.
Mitsubishi imported an i for every advance order it received from a consumer. When orders were canceled, Mitsubishi reallocated those vehicles to new dealers, allowing nationwide availability to be accelerated by six months to the end of June.
Sonny Nejad, manager of Puente Hills Mitsubishi in Puente Hills, Calif., said his dealership has sold six units, mostly to EV enthusiasts cross-shopping the car against the Nissan Leaf.
He said he was pleased with early promotional efforts, including the dedicated Web site for the i, but more advertising is needed to boost awareness.
Low price, low margin
Mitsubishi expected the i's price -- at $29,975, including freight, it's the market's least-expensive EV -- to attract U.S. buyers. But the strategy is costly.
Mitsubishi's North American operation loses money on every i it sells here. Yoshikazu Nakamura, the former chief of Mitsubishi's global EV business unit, said in summer 2011 that the car likely would continue to lose money for at least the first two years of i sales in the United States. A source with knowledge of the situation said Mitsubishi is losing about $8,000 per unit.
Hasegawa declined to confirm the loss figure, but conceded that "the cost is quite high. This strong yen is not easy for us, let me put it that way."
Selling the i has been a costly proposition for dealers, too.
Each Mitsubishi dealer had to invest about $20,000 to become certified to sell the i. The expense paid for dealership charging equipment, technical and sales training, diagnostic tools, showroom signs and an electronic kiosk displaying information about the i.
Dealers say margins on the i are slim. Mitsubishi agrees, but won't provide specifics.
Still, dealer council head Grove thinks the i can be an asset for Mitsubishi. Grass-roots marketing -- he has lent demonstration units to potential fleet customers -- and the halo effect could pay off, he says: "You may not sell an i, but you might sell some other Mitsubishis."
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