Mitsubishi Gears Up Dealer Network
Mitsubishi plans to add U.S. dealerships, replace underperforming dealers and require dealers to revamp the exterior and interior of their dealerships as part of plan to give the brand a new image and make it more recognizable.
The effort comes as the automaker is expected to introduce a wide range of redesigned vehicles next decade that will share vehicle platforms, powertrains, as well as plug-in and all-electric technology with Nissan and Renault. Mitsubishi joined the Nissan-Renault Alliance last year when Nissan took controlling interest of Mitsubishi, which resulted in renaming it the Nissan-Renault-Mitsubishi Alliance. Nissan and Renault operate independently but have substantial cross-sharing investments in each other.
Don Swearingen, executive vice president at Mitsubishi Motors North America, Inc., said the company told U.S. dealers last month “that we plan to grow 20 percent over the next year, and we told them that we are going to have a new image program for the brand.” The program will be global, “no matter where you are in the world, you will clearly know that it is a Mitsubishi franchise,” he said. Dealers will be required to create a new façade for their dealership, post new logos and signage. as well as make other changes. The complete list of requirements will be announced early next year.
Product blitz coming
The announcement comes as Mitsubishi prepares for a new product blitz. The 2018 Outlander plug-in hybrid goes on sale this month followed in March with sales of the 2018 Eclipse Cross, a new compact crossover that will compete with the Chevrolet Equinox, Honda CRV and Toyota RAV4. Mitsubishi is planning its biggest marketing campaign in about a decade for those two new vehicles with a large emphasis on Hispanic buyers. Those buyers account for about 20 percent of U.S. sales. Mitsubishi also markets the Lancer and Mirage.
Special lease programs are planned for the plug-in hybrid Outlander and the Eclipse Cross. Currently, a little over 5 percent of all Mitsubishi vehicle transactions are leases, a miniscule number compared to the industry average of about 33 percent. “Leasing keeps the customer loyal to the brand so we are looking to increase that,” he said.
The redesigned 2021 Outlander will be first vehicle to share an alliance platform, powertrain and technology. “Most of the stuff from the alliance comes in 2022,” he said, but the final decisions on which vehicles Mitsubishi will market in the United States has not been determined.
Swearingen said since Mitsubishi’s entry into the alliance, non-Mitsubishi dealers have expressed interest in selling the automaker’s cars. “We have a lot of people raising their hand, saying they want the franchise. But if it is not in the right market, if it is not where we can grow the business, I don’t want a dealer to struggle,” he said.
The automaker has 360 U.S. dealerships and expects that number to grow to 370 by the end of its fiscal year, March 31, 2018. In addition, he expects to replace about 10 underperforming dealers with new dealers who will take over existing dealerships.
“Here is where our focus is now. We need to make sure our dealers are engaged and profitable. We went through some tough years. Some guys put us on the back burner. We went to them this year and said, we’re back, we’re engaged, we have the programs, you need to be engaged,” he said. “We had some hard talks with dealers. Some said, no problem, we will get reengaged. We have seen their sales go up. We set aggressive but reasonable targets for them and they improved. Some said nope, help me find a buyer or nope, I am ready to terminate.”
Swearingen said the company will add 20 to 25 U.S. dealers the following year during its 2019 fiscal year. Of that number, approximately half will be new dealers replacing the owners of existing points. The other half will consist of new dealerships in geographic areas where Mitsubishi does not have a presence. That will bring the dealer count to a little over 380 dealerships.
“The dealers are very excited about our growth,” he said. “The market is down 1.8 percent and we are up year-to-date about 7 percent” with 95,185 sales. November sales were up 24.8 percent. “The dealers are engaged, they are seeing growth. The crossover vehicles will be the bread and butter going forward, and the Eclipse Cross and the Outlander plug-in hybrid play a key role in that.”