Mitsubishi is coming off a turbulent period. The brand is regaining its footing after DaimlerChrysler abandoned its controlling interest in Mitsubishi in April 2004. At the time, there was concern that Mitsubishi could pull the plug on Mitsubishi Motors North America Inc., which Mitsubishi denied.
Given that recent history, Ted Terp, chairman of the Mitsubishi National Advisory Board, said many dealers have dropped the franchise -- so many that it could actually be a little low on dealers. In turn, he said, Mitsubishi has been more lenient in its policies toward dualed dealerships, and the factory has been less likely to push inventory on the dealers.
There were 545 Mitsubishi dealerships in the United States in January 2006, down from 575 a year earlier and 646 a year before that. Terp said several more dealers quit the franchise in 2006.
Mitsubishi's U.S. light-vehicle sales fell 23.3 percent in 2005. 2006 sales were off 4.4 percent. Terp said about 550 dealers and annual sales of around 150,000 would be appropriate for the brand.
He gave Mitsubishi high marks for the fall launch of the redesigned Outlander SUV, and he said the redesigned 2008 Lancer sedan should help sales.
While he is satisfied overall with the product, one of the brand's main problems is that it needs to spend more money on advertising, Terp told Special Correspondent Jim Henry.
How do you expect the net profits of Mitsubishi dealers in 2007 to compare with 2006 profits?
Higher. We've got the new Outlander, and then we have the new Lancer. Dealers have become accustomed to the new stairstep (incentive program based on volume targets), the new advertising, and kind of tighter control on inventory. The dealers have adjusted their expenses, with the numbers going down from what they were.
Is there one dual in particular that seems to be more common?
Kia seems to be popping up lately.