LOS ANGELES — Mitsubishi is viewed as a distressed brand for bargain hunters satisfied with cheap quality.
And Fred Diaz says that's the brand's own fault.
For years, the automaker's new North America CEO said, Mitsubishi ate away at its brand perception in the U.S. by being overly aggressive with incentives. That gave consumers the impression that Mitsubishi was a distressed brand. A withered product portfolio, a U.S. plant closing and a fuel economy scandal in Japan didn't help.
The product pipeline is flowing again, with crossovers that are in the sweet spots of U.S. market growth, and Mitsubishi is now part of the well-heeled Renault-Nissan Alliance. But looking ahead, Diaz said he believes the company will need a more disciplined incentive strategy, as well as greater attention to quality, to help repair its image. He doesn't want Mitsubishi to only be known as a maker of budget vehicles.
And he knows it won't be a quick fix. "How do we make sure that we're taking care of the brand so we're not spending too much from an incentive standpoint that makes our product look like a distressed product and a distressed brand?" Diaz said in an interview at Mitsubishi Motors North America's headquarters in Cypress, Calif. The answer, he said, is in "learning how to discipline ourselves, to rein ourselves back in and quit being the high-value-only brand, but more of the great-quality, great-value brand."
Diaz admits he didn't think much of Mitsubishi's quality before the brand joined the alliance. After all, it routinely ranked near the bottom of J.D. Power's annual Initial Quality Study rankings.
His perception changed when he shifted from the Nissan side to Mitsubishi and had a chance to examine the company's warranty claim data. To his surprise, he said, the claim figures were low. Yet in the "real world," Diaz says, the assumption is that Mitsubishi's quality "isn't as good as it really is."
It's a challenge, but it gives him something to work with as he strives to polish Mitsubishi's image. So does a winning streak of U.S. sales growth that pushed volume to 103,686 vehicles last year, the first time Mitsubishi topped 100,000 since 2007, and up 7.7 percent from a year earlier.
In a three-year plan unveiled in October, the automaker said it's looking to hit 130,000 sales a year by the end of that period, with an expected lift from the long-delayed Outlander PHEV and Eclipse Cross that are now on sale.
To power that volume, Diaz is looking at ways for the company to get more commitment from its U.S. dealers — starting with showing more commitment to them.