LOS ANGELES — Mitsubishi's once-promising U.S. comeback has ground to a halt.
For most of the decade, Mitsubishi has been in a deep funk in the United States. Then sales last year rose 8.8 percent to 128,993 — the first annual increase since 2002. But North America CEO Hiroshi Harunari's turnaround plan has hit the skids in 2008.
Sales were off 23.4 percent in the first half, after plunging 42.4 percent in June. And the one car in demand during the recent rise in fuel prices, the little Lancer, is in short supply.
Dealers complain that Harunari has focused too much on cutting costs. They say the brand suffers from slim product offerings, a paltry ad budget and prices that aren't competitive.
Mitsubishi executives say they remain committed to the U.S. market, but retailers are worried. The company recently closed two of its four field offices and cut 49 sales positions at its U.S. sales division, including the headquarters in Cypress, Calif., and the regional offices. The company also has eliminated many of the dealer ad associations.
Dealers have received some hopeful news: Mitsubishi Credit is expected to get back into the retail financing business, opening the door to higher-risk customers. But some distressed dealers say Mitsubishi does not have the money to pique interest in the product. And when they get people in the door, there's too little to choose from.
Both the mid-sized Galant sedan and Endeavor crossover are long in the tooth. The Endeavor went on sale in March 2003 and got a minor nose job for 2006 model year.
The Galant was last redesigned for the 2004 model year. The 2009 model went on sale in February with new front and rear sheet metal and restyled headlights and taillights. Dealers complained it looked too much like the old model.
And the Raider pickup, which is based on the Dodge Dakota, has been a sales disaster, with only 1,128 units sold this year.
"How can you sell more with so few cars?" asks Armen Avanessian, general manager at Glendale Mitsubishi in Glendale, Calif.
In June, sales were down year-over-year for all six nameplates: the Galant, Lancer, Raider, Endeavor, the small Outlander crossover and the sporty Eclipse coupe.