Tim Tozer: Mitsubishi must focus on manufacturing global cars.
About a year ago, Mitsubishi's European sales plunged. News in April that DaimlerChrysler AG had pulled out of its alliance with Mitsubishi undermined consumer and dealer confidence in the brand, particularly in Germany.
Tim Tozer became CEO of Mitsubishi Motors Europe in September. His three-point strategy to get the company back on track could well be a template for a Mitsubishi recovery in North America:
- Cut the local factory's output to match sales.
- Focus on key markets and models.
- Simplify the lineup.
In the United States, Mitsubishi had taken a similar tack. It dropped production at its Normal, Ill., plant from two shifts to one on Oct. 1 because of poor sales.
Rebuilding in Germany
In Europe, Tozer next devoted himself to Germany and Russia, two of Mitsubishi's top three markets there.
Mitsubishi's top European market in 2004 was the United Kingdom, with sales of about 36,000. Germany, trailing by fewer than 100 units, was in second place, while Russia had sales of about 30,100. By 2007, Tozer says, he wants to sell 150,000 in those three markets compared with about 102,000 last year. He aims to push sales in Germany back up to about 45,000, he says.
By the middle of last year, though, Germany was the weakest of the three markets. Tozer and his staff made it their top priority to work with Mitsubishi's German dealers to rebuild sales.
The efforts in Germany appear to be working. Mitsubishi's sales there in January and February rose approximately 24 percent in a declining market, Tozer says.
Tozer sees Russia as the key growth market. The Mitsubishi Lancer is second in the market there to the Toyota Corolla.
In November, Tozer sat down with executives from Mitsubishi's Russian importer, Rolf Holding, and asked, "What do we have to do to get to 40,000 or 45,000 this year?" Together they planned the mix of colors and other features that were needed. In the first two months of 2005, Tozer says, sales in Russia are about 25 percent above the target pace.
Tozer also attacked costs by simplifying the lineup.
In France, for example, Mitsubishi plans to sell a modest 5,000 Colts this year. Yet Tozer discovered the company was offering the Colt with about 45 different combinations of equipment. He trimmed that to 20.
"When you're Mitsubishi and a roughly 1 percent share company, you can't have overly complicated ways of working," he says.
That's a lesson Mitsubishi will have to learn worldwide. "The biggest issue the corporation will have to focus on the next five years is the global car," Tozer says.
Takashi Nishioka, Mitsubishi Motors Corp.'s new CEO, agrees. His restructuring plan for the troubled carmaker will emphasize cars for the global market and fewer cars sold only in specific regional markets. That implies fewer cars designed for the United States.
Says Tozer: "I don't think we'll be sitting here in five years' time looking at a lineup that's pretty unique for North America, with a degree of uniqueness for the Japanese market, and then another degree of uniqueness in Europe. Finally, that's unaffordable."