LOS ANGELES -- Mitsubishi Motors Credit of America Inc. says it is once again competing aggressively for dealer and consumer loans.The company had curtailed lending after huge losses in fiscal 2003 and 2004. Uncompetitive loan rates since then have hurt sales, say Mitsubishi dealers.
But starting in July, aided by partners Merrill Lynch & Co. and CenterOne Financial Services LLC, Mitsubishi Credit says it is:
"This partnership hits dead center in one of our overarching objectives around our revitalization plan. That's to help our dealers sell cars," Young says.
Dealer Al Gossett, who owns two Mitsubishi stores in Memphis, Tenn., says the new partnership will help.
"Before, Mitsubishi Credit wasn't buying paper," Gossett said. "Mitsubishi Credit, whether working with Merrill Lynch or Barnum and Bailey Circus, must help the brand. They need to buy paper so our customers can buy Mitsubishi cars.
"I'm not saying we didn't need new product. But they took the Strychnine pill when they let the credit arm go off the deep end."
The partnership went into effect July 8. It calls for Merrill Lynch to fund 100 percent of all of Mitsubishi Credit's retail vehicle loans.
CenterOne, part of JM Family Enterprises Inc. in Deerfield Beach, Fla., provides services for the contracts, such as approving loan applications, customer service and collections.
Mitsubishi Credit will continue to provide all so-called wholesale loans to dealerships for floorplanning and capital investments.
Young says Mitsubishi Credit has about 30 percent of the consumer loans and 35 percent of the wholesale business at Mitsubishi dealerships. He says the goal is to reach about 50 percent of both retail and wholesale by July 2006.
Mitsubishi dealerships sold 65,753 vehicles through the first six months of the year in the United States, down 35.4 percent from the year-ago.
The company's goal is to sell 143,000 units this year in the United States. In 2003, the company sold 256,810 vehicles.
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