LOS ANGELES — Fred Diaz is excited about where the Renault-Nissan-Mitsubishi Alliance can go.
Diaz, who became CEO of Mitsubishi Motors North America April 1, says each side has gadgetry that could potentially be worked into the others' portfolios. Nissan, for instance, is a fan of Mitsubishi's Super All-Wheel Control drivetrain and its plug-in hybrid setup, Diaz said. And Nissan's suite of safety technologies is "very interesting" to Mitsubishi.
Diaz, 52, believes excitement around the alliance is spreading among prospective dealers who now think it's an opportune time to vie for a Mitsubishi franchise. In years past, Diaz said, the company sometimes found it hard to fill open points.
This interest from dealers will be useful as Mitsubishi looks to expand its U.S. dealer base, with California, Florida and Texas among the target markets.
Before becoming CEO of the North American arm, Diaz spent nearly eight months in Japan working at Mitsubishi Motors Corp.'s headquarters in the global marketing and sales division, where he was tasked with performance optimization at the newest member of the alliance. He spoke with Staff Reporter Vince Bond Jr. at Mitsubishi's North America headquarters in Cypress, Calif., about his time in Japan, his relationship with dealers and ways the automaker can improve its marketing strategy to build awareness.
Q: What were some of the biggest lessons learned in Japan?
A: Just getting to know the people was very important. Developing relationships, knowing who runs what department, understanding how the mother ship coordinates and operates with the global regional offices across the world. Really knowing who to call when you have a problem, or who to go to when you need to get something done. When you have to live the culture, live with the people day in and day out, taking the subway to work and home every day, it's a very different experience. I learned a heck of a lot more about the Japanese culture and how the mother ship works with the global regions in eight months than in the five years I was with Nissan. I would be at a huge disadvantage if I had not had that experience before being given the opportunity to come here.
Does the North American operation have a degree of autonomy from Japan on decision-making?
A lot of autonomy. Very clear delegation-of-authority distinctions that are within my span of control. Then there are certain levels of DOA where there needs to be straight communication with Japan. For the most part, what we do here is operate independently and make 99 percent of all decisions and do a good job of keeping Japan informed.
Is this a new Mitsubishi strategy to have people native to regions run operations in those places?
It was a departure from past strategies they've had here. That's [Mitsubishi Motors COO] Trevor [Mann's] belief. Not a Mexican for the sake of having a Mexican or an American for the sake of having an American, [but] an American who knows the American market really well to lead.
Dealers are looking at you as an ally and an advocate within the company. What are they telling you about the company, and what are you trying to impress upon them?
Dealer engagement is something that is really important for me. It's been a key recipe to my career in the automotive business. These guys are smart and they have their own livelihoods and skin in the game. If their dealership doesn't do well, that's all they've got.
In the eight weeks I've been here, I've already met with, in person, our national advisory board three times. One of them was a strategic seminar. The other thing I did was travel across the U.S. to all of our key markets and had a town hall grass-roots meeting where every dealer in the U.S. had an opportunity to listen to my vision and our strategy and things I'm looking at. Also told them about my plans to meet with the national advisory board at least every other month in person, if not more often.
Then we had the strategic council meeting with the dealer advisory board, and that was very good. We bounced ideas off of them. They bounced ideas off of us. I think it was very refreshing for them to see the level of interest we have in hearing their input. What are we doing wrong? What can do we better? They haven't had that type of exposure to the person in this chair and that type of direct interaction. That happens to be what I'm big on.
You are coming in as Mitsubishi has had several consecutive years of U.S. sales increases. How will you build on that and improve?
Strategically, I want to make sure that I'm not going off in a direction and dealers aren't coming with us. That's why we put our heads together. For the most part, there was strong alignment on everything we were doing and there were a couple of issues where [dealers thought], "Hang on a second. Have you thought about this or thought about that?" Also, giving them a future vision and taste of where we're going from an alliance standpoint. I think that was the first time they realized the alliance was for real. We are going places with this alliance and we're all going to benefit from it.
A lot of the discussions centered around how do we go to market in a way that makes it a lot easier for the dealers to comprehend our incentive package structure and so forth so they can get behind it and put some muscle behind it. And the other thing is how do we advertise at the Tier 1, Tier 2 and Tier 3 level so we can leverage the power of all of our dealers across the nation as opposed to being disconnected. How we do we connect them so that the messaging is consistent and strong as opposed to just being scattered all over the place?
Is there a generation of buyers who don't know what Mitsubishi is about?
There is. We suffer greatly from an awareness issue. That's one of the big things that the dealers and I were talking about. The dealers are good. If we can get customers and traffic into the showroom, their closing ratios are very strong. Creating that awareness is one of the biggest things we're looking at right now.
The company has been aggressive at marketing during NBA games and other sporting events. Is that something you want to continue? Is that the right audience?
Absolutely. One of the things I was proud to find out was that we over-index really well with the minority population, particularly with the Hispanic population. Almost 25 percent of our vehicle sales come from the Hispanic population. I don't think we're done. I think there's a lot more we can do there with the brand. We're also spending more in advertising this year than we've spent over the last 11 years.
The other big initiative we're looking at is the network. We have too many key open markets where we don't have participation. Now that the word is out that we're a part of this alliance, and that this alliance is going to bring us new products that we'll be able to compete with that have the technologies that come from Renault, Nissan and Mitsubishi combined, there's a lot of interest.
It's amazing how the interest has just spiked over the last 12 to 18 months. Before, we had a tough time finding a dealer who might be interested in an open point. Now we have two or three prospects that are competing for those open points.
What are some of the markets where Mitsubishi feels it can expand its dealer base?
They're all over the nation. We have opportunities in California, Texas, Boston, Chicago, Florida. There are hardly any markets where we don't have some key opportunities that we can go into.
Some dealers have said the company's sales targets have been too tough. How do you respond to them?
[At] the strategic council seminar that I told you about, that was a big subject of conversation. ... If we want to do an objective-based program, how do we do it? What are the mathematics and algorithm behind setting objectives that ensure we meet our growth plans as a corporation, but at the same time don't feel unattainable to you guys? I think the dealers were quite surprised that I was willing to have that discussion with them.
What type of vehicles will Mitsubishi build on the shared platforms with Renault-Nissan?
We have some neat technologies like Super All-Wheel Control that Nissan really likes. Our PHEV technology, Nissan really likes that. Nissan has some neat technology. They've invested in autonomous vehicles. They have this safety tech package that is very interesting to us. What I made sure I told dealers is it's not like we're only benefiting only from Nissan. Nissan is benefiting from us as well and our technologies. Together, can you imagine how when those technologies merge and all get into the same vehicles, how strong our products are going to be able compete in the marketplace?