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Old 01-14-2013, 07:05 AM   #1
Daddy Butter
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Default The future of Mitsubishi in the U.S.?

It's obvious that Mitsubishi has been on the decline over the past few years. XDCX raised the issues in the previous thread from 2010, "Does Mitsubishi have a future in the U.S.?". I'd like to revisit this question and hopefully get some insight from Mitsubishi dealers' take on the whole issue.

This past December the President of Mitsubishi Motors Corp. discussed the company's short-to-mid-term strategy over the next few years, indicating a shift towards promoting the Outlander and Outlander Sport more heavily and introducing the Mirage to the U.S. market following the discontinuation of the Galant, Spyder, Endeavor and Eclipse this past year.

At the same time, Mitsubishi North America is asking HQ to double its marketing budget, which was considered low to begin with, for the upcoming fiscal year beginning April 1.

Just from my limited perspective on this, my take-aways and questions are:

1. Is it reasonable to assume that the franchise will be able to grow based on a couple crossover models?

2. The marketing issue must be addressed. When was the last time you saw a Mitsubishi commercial?

3. How much control do dealers have in this, and what steps can they take?
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Old 01-14-2013, 08:41 AM   #2
XDCX
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Great thread - I'm impressed.

I'm pressed for time at the moment so I'll wait until later this afternoon/evening to add my thoughts to your thread.
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Old 01-14-2013, 02:05 PM   #3
tnpartsguy
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Cool Follow Suzuki's lead, Mitsu

Get out of the US market. Don't let it drag down your homeland sales.

Mitsu missed the market too many times; just like Suzuki and before that, Isuzu. Isuzu tried to drop cars and market just SUV's and trucks, but since all they were peddling was a re-badged Trailblazer and Colorado.

The Mitsu franchise has been everywhere here in Middle TN, nobody keep its longer than a year anymore. The Evo is a great tiny car, but it's priced out of it's segment (Yes, I know that segment is the same as a WRX Subaru, but Subbi's are at least steady for the most part).

I would give Mitsu hope if they were still paired with Chrysler in any way, but on their own... nope.
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Old 01-15-2013, 07:41 AM   #4
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I work at a Mitsu store and would have to agree with eveything that tnpartsguy says. We lost our Suzuki franchise earlier this year and I'm just waiting for the hammer to drop on Mitsu to.
In the meantime does anyone need a sub-prime pro in the Sarasota, Fl area?
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Old 01-15-2013, 09:03 AM   #5
XDCX
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I think Mitsubishi has produced some great vehicles over the years and it's ironic the vehicles I tend to associate with Mitsubishi's greatness are the ones they've decided to kill off.

As an example, the old Ram 50 truck from the 1980s was a fantastic vehicle in my opinion. They were cheap, reliable and lasted forever. The Boeing Company was using Ram 50s to move parts and equipment in their plants and it wasn't uncommon for the vehicles to rack-up 200K miles without any major repairs.

Mitsubishi let their small truck grow old and decided to ditch it for a re-badged version on the Dodge Dakota - and we all know how that turned out.

The other vehicles I associate with Mitsubishi's strength were their excellent turbocharged vehicles. I remember the first time I drove a AWD Eagle Talon with a turbocharged five speed - the vehicle performance was phenomenal and the interior design was light years ahead of anything Chrysler had available at the time.

More recently, the Mitsubishi EVO has established a cult-like following but Mitsubishi's walking away from that market. MMC doesn't offer a high-horsepower vehicle in the U.S. any longer and there's nothing to keep the EVO faithful loyal to the brand.

Does Mitsubishi have a future in the U.S.? I don't think so and I'm even less convinced after reading the article from Automotive News linked in the first post of this thread.

In answer to your questions:
1. No, I don't think Mitsubishi's limited product offerings (Outlander, Outlander Sport and Lancer) will be sufficient to sustain a U.S. Dealer Network.

2. Trying to create advertising awareness for a national car brand that only sells 3,500 - 4,000 vehicles per month is just about impossible. Mitsubishi would probably be better off to use their limited resources and create lease deals or other incentives their dealers could advertise in their own markets.

3. In my opinion the dealers have virtually zero control and the best thing they can do is limit their exposure to the possibility Mitsubishi will pull out of the market.
Concerning the Mitsubishi Dealers, I'd be interested to learn how active their Dealer Council is and whether the Dealers are passionate about keeping the franchise alive? The impression I get is most Mitsubishi Dealers have multiple franchises and Mitsubishi's fate in the U.S. is mostly irrelevant to their lives. (That's just my impression, maybe I'm wrong?)

Last edited by XDCX; 01-15-2013 at 09:18 AM. Reason: Made minor changes to make the (long) post easier to read
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Old 01-15-2013, 09:51 AM   #6
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Quote:
Originally Posted by XDCX View Post
Does Mitsubishi have a future in the U.S.? I don't think so and I'm even less convinced after reading the article from Automotive News linked in the first post of this thread.
I was amazed when I read that Mitsubishi's plan to keep their assembly plant in Normal, Illinois viable was to build the Outlander Sport there and then export some of the production to Russia, Latin America and the Middle East.

How will Mitsubishi be able to compete with other OEMs who sell vehicles in those markets that build them in plants that are closer to the market with significantly lower labor rates?

To me, Mitsubishi's plans for their Normal, Illinois plant just seem to be a short term effort to keep the plant operational so they can find a buyer.
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Old 01-15-2013, 11:16 AM   #7
steve_biegler
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My take on the questons:

1. NO

2. Without volume there is not enough money to make the necessary splash. I recall as the smallest dealer in my 20 group I would get chewed out for high advertising per vehicle sold on a pretty regular basis, but throw in another couple sales and I would below the other guys. This is just a numbers game.

3. I don't care what manufacturer you are talking about the dealers have NO, I repeat NO control. If something goes the dealers way its just because its what the manufacturer wanted anyway. Dealer boards for input are just there to make it look good. I used to laugh at the stuff Chryslers dealer console would come up with and the bogus responses.
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Old 01-15-2013, 12:24 PM   #8
Daddy Butter
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Thanks for the insight, everybody. I suppose the increased marketing would just be a cosmetic solution for a systemic problem; a band-aid for full-blown cancer.
Quote:
Originally Posted by XDCX View Post
The impression I get is most Mitsubishi Dealers have multiple franchises and Mitsubishi's fate in the U.S. is mostly irrelevant to their lives. (That's just my impression, maybe I'm wrong?)
That's the impression I get as well. At least, then, the fallout for dealers would be minimal and relatively easy to manage if and when Mitsubishi pulls out of the U.S.

Last edited by Daddy Butter; 01-15-2013 at 12:33 PM.
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Old 01-15-2013, 01:07 PM   #9
XDCX
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Quote:
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That's the impression I get as well. At least, then, the fallout for dealers would be minimal and relatively easy to manage if and when Mitsubishi pulls out of the U.S.
We had a great thread a couple of years ago about what Mahindra should do regarding their dealer network. One of our members suggested that if Mahindra was smart they would only offer their franchise to single point, first generation dealers who had "all of their eggs in one basket."

If I were responsible for trying to save Mitsubishi I'd do the same thing - get the franchise in the hands of an on-site Dealer Principal whose prosperity is tied to the success of the dealership.

A hard working Dealer with talent and drive can often overcome the challenges associated with selling a weak brand with limited product offerings.
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Old 01-15-2013, 02:06 PM   #10
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Quote:
Originally Posted by XDCX View Post
A hard working Dealer with talent and drive can often overcome the challenges associated with selling a weak brand with limited product offerings.
What a great quote! To bad no one in the corprate world believes it anymore.
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Old 01-15-2013, 02:58 PM   #11
DealerEx
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Quote:
Originally Posted by XDCX View Post
A hard working Dealer with talent and drive can often overcome the challenges associated with selling a weak brand with limited product offerings.
If anyone doesn't believe that, go ask almost anyone of the 789...most of'em proved it beyond a doubt back in the late 70's and 80's.
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Old 01-18-2013, 08:36 AM   #12
XDCX
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Quote:
Originally Posted by steve_biegler View Post
What a great quote! To bad no one in the corprate world believes it anymore.
Quote:
Originally Posted by DealerEx View Post
If anyone doesn't believe that, go ask almost anyone of the 789...most of'em proved it beyond a doubt back in the late 70's and 80's.
I agree on both counts. It seems all of the OEMs are currently enthralled with mega-dealers and public dealer groups.

In my opinion, damn few people go shopping for a Mitsubishi. If Mitsubishi's going to have a chance of surviving in the U.S. they need a Dealer Network that can compensate for their OEM's shortcoming in terms of marketing and vehicle selection.

I do think Mitsubishi can be saved it they intend to stay in the U.S. but they're going to need to find some dealers who actually care about their franchise and have their prosperity tied to MMC's success.
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Old 01-18-2013, 12:28 PM   #13
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Quote:
Originally Posted by XDCX View Post
I agree on both counts. It seems all of the OEMs are currently enthralled with mega-dealers and public dealer groups.

In my opinion, damn few people go shopping for a Mitsubishi. If Mitsubishi's going to have a chance of surviving in the U.S. they need a Dealer Network that can compensate for their OEM's shortcoming in terms of marketing and vehicle selection.

I do think Mitsubishi can be saved it they intend to stay in the U.S. but they're going to need to find some dealers who actually care about their franchise and have their prosperity tied to MMC's success.
In other words they should court the 789 to save them!
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Old 01-22-2013, 12:03 PM   #14
XDCX
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Quote:
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In other words they should court the 789 to save them!
In a lot of way I think that would make perfect sense.

To be fair, some of the 789 truly were poor dealers and some were already out of business but Chrysler hadn't processed their termination yet.

That said, we all know that many of the 789 are talented dealers who were robbed of their franchise, their livelihood and their identity. Many would love an opportunity to prove that Chrysler's decision to terminate their franchise was a mistake and they'd like to go to work every morning so they could take more customers away from Chrysler.

In his first book Lee Iacocca echoed the same sentiments when he was fired from Ford. He went to work each morning at Chrysler with the purpose of inflicting pain on Ford by stealing away their customers.

I do think Mitsubishi can be saved but I doubt it will happen unless the parent corporation makes a number of changes and part of that process has to be getting their franchise into the hands of more dealers who have their prosperity tied to Mitsubishi's success.
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Old 01-22-2013, 06:44 PM   #15
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I remember when good Chrysler salespeople and managers were in strong demand by the import dealers when the import market got sluggish. Theory was Chrysler people were use to selling average or worse cars and, as a result, were perceived to be much better than the "order takers" that worked for the import stores.

My comment about courting the 789 was tongue in cheek and I agree 100% that there were many in the 789 that deserved to go. But just as importantly there were many of the dealers that survived that should not have.

Mitsubishi has to come up with some "outside the box"thinking QUICKLY if they want to survive in U.S. Since new product isn't going to come flooding into the market they have to rethink marketing. This is local dealer specialty. I would venture to guess they don't have budget for big national market push so put dealer cash on product,give the dealers cash to advertise product, then get out of the way.
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