Mitsubishi beefs up marketing, weighs more U.S. nameplates
BEND, Ore. -- Mitsubishi executives in the United States and Japan are evaluating plans to bolster the brand's U.S. lineup with new vehicles, including a mid-sized sedan and a crossover or SUV larger than the Outlander compact crossover.
Masatoshi Hasegawa, executive vice president of corporate planning for Mitsubishi Motors North America, says Mitsubishi is considering returning to those segments as part of a long-term U.S. product plan.
"We are looking into a possibility for the [mid-sized sedan] segment, and we may look into maybe a bigger brother to the Outlander," he said.
Mitsubishi also needs a successor to the aging Lancer compact car, Hasegawa said.
Such changes are unlikely before 2015. This year, the company wants a more consistent advertising presence on national TV, and will boost advertising starting April 1. Mitsubishi sales plummeted 27 percent to 57,790 vehicles last year.
A comeback is "not going to happen overnight," Hasegawa said in an interview at a media event here. "We went into a descent, so it's going to take time to get back up again. But I think now we will definitely go into an upward trend."
A restyled Outlander arrives this summer. The crossover rides on a carryover platform from the outgoing Outlander but features new sheet metal, interior, safety features, all-wheel-drive system and better fuel economy.
A national advertising campaign for the 2014 Outlander is set to begin in June and will feature prime-time commercials on national cable and network TV. Internet advertising also is planned. Mitsubishi's ad agency, 180 LA, will begin work on the campaign next month, Hasegawa said.
Mitsubishi has had a minuscule TV presence since the Outlander Sport's launch in 2011. The 2014 Outlander's campaign, plus more ads for the Outlander Sport, will give Mitsubishi a consistent national advertising presence for the first time in years.
"We'll be present every month -- no blackouts," Hasegawa said.
But boosting sales will be tough. Mitsubishi had just a 0.5 percent U.S. market share in the first two months of 2013. Each of the brand's four nameplates -- the Lancer, Outlander Sport, Outlander and i-MiEV electric car -- occupies the sales basement in its segment.
Mitsubishi cut its lineup roughly in half last year by phasing out the Endeavor crossover, Galant mid-sized sedan, Eclipse coupe and Spyder convertible. The loss of those vehicles was the main factor in Mitsubishi's 2012 sales decline.
Now, the company wants to concentrate on its core nameplates: the Outlander and Outlander Sport crossovers. Mitsubishi plans to double its U.S. marketing budget to an estimated $170 million for its fiscal year beginning April 1. But the company is targeting flat U.S. sales this year of 56,000 to 60,000 units.
After the Outlander's launch, the new Mirage subcompact will debut in the fall, followed by a plug-in hybrid version of the Outlander in early 2014.
Hasegawa says a return to 100,000 U.S. sales is possible, but unlikely until 2015 or 2016 and will require more new vehicles and a stronger retail network.
Hasegawa: “We went into a descent, so it’s going to take time to get back up again.”
Dealers 'bite the bullet'
"When you look frankly at the situation, we're not there yet," Hasegawa said of returning to 100,000 U.S. sales. "We'll try, but it needs to be in combination with a product lineup and with training for our sales network."
Mitsubishi's dealer network has declined from 491 franchises as of Jan. 1, 2008, the last time it sold more than 100,000 units in the United States, to 382 as of Jan. 1. Dealership revenue from parts and service work -- crucial to dealer profitability -- is low because of fewer Mitsubishis on the road.
Only a little more than half of Mitsubishi-exclusive dealerships are profitable, the company says.
"This is why we intend to reinforce our model lineup and increase our marketing spend. If you don't have that, the dealers will have trouble sustaining their profitability," Hasegawa said. "Since we've gone into this descent, I think we have to apologize to the dealers. They have had to bite the bullet for the time being."
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