In the waning days of 2017, the mainstream midsize crossover segment in the U.S. will get its first plug-in hybrid electric vehicle. It will beat any current luxury crossover model for both MPGe and electric-only range, come with direct-current fast-charging and will be available nationwide at a price attainable by many households.
But the badge on the chrome grille won't be Honda's, Toyota's or Ford's. It will be Mitsubishi's. The Outlander PHEV crossover, new for 2018, will be a low-volume model. Sales goals are a modest 3,000 to 4,000 a year. But it is a crucial opportunity for the brand and its dealers in a long journey back to relevance in the U.S.
Get this step right, and it will be an essential foot in the door of the electric conversation; get it wrong, and it could complicate the launch and awareness of other electrified models coming from Mitsubishi.
Thus, the brand faces two key challenges: getting the word out about the new Outlander plug-in and having in place a dealer body engaged and prepared for the new type of customer this and future electrified models will bring.
Despite being ahead of the pack in affordable crossover electrification — the Outlander PHEV starts at $35,535 including shipping but before any state or federal tax incentives — Mitsubishi knows stiff competition is only a few years away.
"The Outlander [PHEV] is unique, but we won't have that for many years," Don Swearingen, executive vice president of Mitsubishi Motors North America, told Automotive News. "Some of our competitors will be out in the next few years with something similar, and we want to make sure we make a mark."
The Outlander PHEV itself isn't new, just new to the U.S. It's been on sale in Europe and Japan for years, delayed to the U.S. for reasons relating to battery supply and certification issues with regulators.
The extra time has given Mitsubishi time to fortify fundamentals at the dealership level. This includes limiting fleet sales, increasing each store's sales per outlet count and also increasing general engagement among its 360 dealers themselves.
"We have some dealers that are doing fabulous, and we have some dealers that are a little disengaged," Swearingen said. "Our key is to get them re-engaged with the brand. We have dealers selling 100 to 200 vehicles a month, and of course, we'd like all of them to do that."
A dearth of new products in the pipeline has been a key reason for disengagement. Products such as the Outlander PHEV and the new Eclipse Cross crossover due in early 2018 have significantly boosted interest from the dealer body.
The alliance with Nissan Motor Co., which now owns a controlling stake in Mitsubishi Motors Corp., also has gone a long way in catching dealers' attention and giving them confidence in the future of the brand, Swearingen said.
A reasonable fleet mix also has helped. Fleet sales are currently around 11 percent of Mitsubishi's annual U.S. sales, which it counts during a fiscal year that runs from April through March. That's a significant drop from a peak of 30 percent roughly a decade ago.
But Swearingen sees some fleet sales as good for a small brand such as Mitsubishi, competing with the likes of Honda and Toyota. Fleets are a cost-effective way to raise awareness and put vehicles into the hands of consumers. He would be fine with a mix as high as 18 percent of sales.
Vehicle sales per outlet per month are now around 22, up from a low of around 10 six years ago. Within the next three years, Swearingen hopes to get that number into the mid-30s.