Mitsubishi Motor Sales of Amer- ica Inc. is working to trim vehicle inventories at its port and factory storage yards through a new dealer ordering system.
The new procedure lets dealers order directly from the factories while vehicles are in production rather than from existing stocks at the port.
The program, called 'Order to Delivery,' is credited with a major reduction in the number of cars stored at the company's factory in Normal, Ill. In the past, Mitsubishi often would have more than 10,000 Galants and Eclipses stored near the plant. There are now fewer than 2,000.
The reason, Mitsubishi said, is that retailers and the factory have begun communicating about production, not inventories. Normally, a dealer requests vehicles from the manufacturer, who attempts to match the request from the existing pool of cars and trucks. Factory representatives usually give retailers some of what they want, but in an effort to clear out stocks, they also urge them to take vehicles that do not match orders.
That is no longer the procedure at Mitsubishi, according to retailers. Under the new plan, dealers will ask the factories to build specific vehicles. To help simplify ordering, Mitsubishi has reduced the number of factory options on each vehicle.
Mitsubishi began using the procedure over the summer for its U.S.-made vehicles. This month, it will attempt it on its Australian-made Diamante and the Japanese-built Montero, Montero Sport and Mirage. The company wants virtually to eliminate the pools of autos it keeps at the port, said spokesman Kim Custer.
The automaker declined to elaborate on how the import plan will work. Pierre Gagnon, executive vice president, is expected to outline the program this week in a speech to Los Angeles reporters.
The ordering system still will have some challenges. For example, if a large number of U.S. retailers ask for V-6 engines, the factory might have to alert them that there would be a delay because of supply limitations. The factory would ask whether the dealer wanted to choose four-cylinder engines instead. But the retailer would make the decision to wait or change, and Mitsubishi's inventory would not suffer as a result.