Tagaya: "Gradually, customer traffic is increasing in dealerships."
Still, Mitsubishi will cut production at its Normal, Ill., factory to one shift starting in October. It will lay off about 1,200 out of 3,150 workers there.
In an interview with Automotive News, Hideyasu Tagaya, Mitsubishi's new president and COO, described U.S. sales as being on "a continuous downward trend."
He blamed the plunge on the company's retreat from an overdependence on fleet business and easy credit terms in the past.
Finbarr O'Neill, CEO of Mitsubishi Motors America Inc., in a statement announcing the cutback at the plant, said: "As we work to rebuild natural retail demand for our vehicles, our production volumes must be adjusted accordingly. We need to be a market-driven, not a production-driven, company."
The Normal plant builds the Mitsubishi Galant sedan, Endeavor SUV and Eclipse sports coupe and Spyder convertible.
It also produces the Chrysler Sebring coupe and Dodge Stratus. But DaimlerChrysler AG has said Mitsubishi no longer will produce those models.
During the first six months of this year, Mitsubishi's U.S. sales were down 26.7 percent to 101,802 compared with the year-ago period. Sales in June fell 45.7 percent to 12,301. One shift at Normal will suffice to cover that sales volume.
But, Tagaya said, "we do not believe that will continue forever."
Within the next 12 months, Tagaya said, Mitsubishi will launch the following models:
The Eclipse variant is one of three new or redesigned models that Mitsubishi plans for the fiscal year beginning next April. Another is a rebadged pickup from Chrysler.
Tagaya said the pickup should be on the market by September 2005, "but there may be some delay."
Mitsubishi is counting on its "Best-Backed Car in the World" warranty campaign to boost sales.
Launched July 1, the program includes a 5-year/60,000 mile "bum-per-to-bumper" limited warranty, a 10-year/100,000 mile limited powertrain warranty and a 3-year/45,000 mile free maintenance warranty.
Thanks to the campaign, "gradually customer traffic is increasing in dealerships," Tagaya said. The upward trend in showroom traffic is "about a 15 percent increase," he said.
"We believe this will work out well," Tagaya said.
He also said he hopes to decide on the fate of Mitsubishi Motors Credit of America "within one or two months."
The company has said it will continue to offer financial services to customers. But it is weighing whether to keep Mitsubishi Credit, outsource that function or tie up with a financing partner.