TOKYO -- Mitsubishi Motors Corp.'s top management likely will ignore its American dealers in the coming months. Its executives will be preoccupied with a sales collapse in Japan.
Mitsubishi's sales tumbled 38.8 percent in May from a year earlier, against a 5.7 percent market decline. The drop is expected to worsen.
American dealers may feel that they need and deserve Mitsubishi's attention. After all, U.S. sales fell 25.6 percent last year and were down 23.0 percent through May. But Mitsubishi's U.S. sales still are 29.6 percent above 1995 levels. In contrast, Mitsubishi's Japan-market sales are 55.4 percent below 1995 levels and are heading further south.
In late 2000, Mitsubishi admitted that it had falsified records and hid defects from the government for nearly 30 years. Because of that recall scandal, the carmaker's Japan sales fell 10.3 percent in 2001 and 14.7 percent in 2002. In 2003, as the scandal ebbed, sales rose 3.4 percent.
Now the recall scandal is back.
The company admits that it didn't conduct a thorough investigation in 2000 before declaring that it had come clean. It has uncovered more hidden defects and cover-ups involving a range of vehicles, including police cars and the Pajero SUV, known as the Montero in the United States.
It is recalling approximately 160,000 vehicles in one action and 116,000 in another. That's nowhere near the 2 million recalled in 2000, but the recall has allowed the Japanese media to launch a full-scale attack on Mitsubishi.
At a hastily called press conference on June 2, the media grilled Mitsubishi CEO Yoichiro Okazaki. The Ministry of Infrastructure, Land and Transportation berated Mitsubishi the following day for not changing its ways as it had promised.
"Our sales in June, July and beyond will probably be hurt," Okazaki said.
In May, other carmakers also suffered sales drops in Japan. But Mitsubishi's was the worst.
Industry sales of compact cars, light trucks, and medium- and heavy-duty trucks and buses fell. That more than offset strong demand for regular-sized cars and 660cc minivehicles. Imports also declined.
