DETROIT - Most of Mitsubishi Motors Corp.'s stand-alone U.S. dealerships are losing money, the CEO of the automaker's North American operations conceded last week.
At least 14 of Mitsubishi's 630 U.S. dealers quit the company this year, said Finbarr O'Neill, co-chairman of Mitsubishi Motors North America. About 440 of the automaker's U.S. stores sell Mitsubishi vehicles exclusively, he said.
"Our dealers have been losing money," O'Neill told the Society of Automotive Analysts in Detroit. "We have to demonstrate to them that unless dealers are profitable, we cannot be profitable."
O'Neill said the tide of red ink began early last year and accelerated as Mitsubishi's problems grew.
Mitsubishi won't replace the dealerships that have left. To the contrary, O'Neill said, the company needs greater attrition in the next two years if it is to achieve a manageable number of dealerships.
"Somewhere around 600 would be fine," he said. "We probably have more dealers than we need."
Mitsubishi will not "slash the dealer body" but will assess whether "we have dealers in the right position in the marketplace," O'Neill added. For example, the company has reduced its fran-chises in the Atlanta area from 14 to 10, he said.