Mitsubishi Chairman Yoichiro Okazaki
"The numbers going through the auctions have dropped tremendously in the last six months," says Michael Seidle, vice president of Bill Seidle Mitsubishi in Davie, Fla. "Prices are sky high."
Mitsubishi Motors North America has slashed its sales to fleets. The company's overall sales tumbled 51.1 percent in July from July 2003.
Mitsubishi's U.S. fleet sales in the 12 months starting April 1 will total about 25,000, down from nearly 75,000 a year earlier, estimates Osamu Masuko, the automaker's managing director in charge of overseas operations.
As a result, fleets are cutting back on the number of used Mitsubishis they send to auctions. With that supply reduced, prices are up.
Chuck Barber, president of Barber Brothers Mitsubishi in Orem, Utah, says, "Galants have gone up $1,500 at auction in 45 days." Barber is chairman of Mitsubishi's U.S. dealer advisory board.
"Mitsubishi products, as a percent of book, are almost double those of other brands" based on figures in the National Automobile Dealers Association guide to used-car prices, Barber says.
Higher prices for used vehicles are "good for the future," he adds. Higher residual values will bring larger trade-ins for current owners' vehicles and help restore confidence in the Mitsubishi brand.
Tom Webb, chief economist of the Manheim auction company of Atlanta, confirms that "prices are better" for used Mitsubishi vehicles. But he says he cannot attribute that trend to a particular cause.
Scott Grove, general manager of Max Madsen Mitsubishi in Chicago, says the automaker's used-car situation is "normalizing."
"Before, we had an excessive amount" of former fleet cars at auctions, Grove adds.
Although the number of late-model Mitsubishi vehicles at auction is down, plenty of older models remain on the used-car market. Grove praises Mitsubishi management for the fleet cutbacks.
"It's the smart thing to do, and they're sticking to it," he says. "They could easily say, 'Let's not see another month of sales falls in the 50 percent range, and resume sales to fleets.' "
Masuko adds: "Of course we want to sell a lot of volume. But we aren't going to chase volume."
The rise in prices of used Mitsubishi vehicles reflects a turnaround. As recently as March, auctions in some U.S. regions had plenty of Mitsubishis on hand, dealers say.
Now, Barber says he's looking for Lancers, and "We cannot get them."
Mitsubishi's new chairman, Yoichiro Okazaki, met last week with the dealer advisory board and company employees at the automaker's North American sales headquarters in Cypress, Calif. Barber says Okazaki offered "encouragement and support" during the initial meeting.
Adds Grove: "His assurance of support, including for Mitsubishi Motors Credit of America, was comforting."