Mitsubishi Rally: Sales grow, new products coming
Turning the corner on slumping sales is easier said than done. In today's fiercely competitive market, that notion is even more apparent. But the booming demand for crossovers has lifted many boats and with key compact crossover SUVs, Mitsubishi has turned a corner and is looking to expand volume.
The 2014 calendar year saw its U.S. sales grow an impressive 24.8 percent (33 percent excluding fleet vehicles) to cap off the year at 77,643 vehicles sold, the automaker's second consecutive year of growth. The popular Outlander Sport led the charge with a volume increase of 24.5 percent (31,054 vehicles), followed by the subcompact Mitsubishi Mirage (16,708), and steady sales gains in the Outlander midsize crossover (13,068). January sales figures mirror last year's promising swing, up 33.4 percent from January 2014. Still, it's a far cry from 2004 when the make sold nearly 350,000 vehicles.
"We went through some terrible times that clearly challenged us as well as our dealer base," noted Don Swearingen, executive vice president of Mitsubishi Motors North America. "My focus is not only to get Mitsubishi back to profitability in North America, but to make sure our dealers are profitable."
So far, the plan is working. Third quarter results show Mitsubishi's North American operations back in the black for the first time in years, while its dealers report profitability is at a 12 year high.
Six new vehicles in the pipeline
Over the coming months, Mitsubishi will debut new and revised versions of its core vehicles in addition to two all-new models - the Mirage G4 sedan and Outlander plug-in hybrid. The 2016 Outlander will be the first current model to don the company's new design language, which will debut in April at the New York Auto Show, followed later in 2015 by the Outlander Sport and Lancer. A refreshed Mirage is expected during the early part of 2016.
Mitsubishi just ended negotiations with South Korea's Renault Samsung Motors for a joint venture to produce a midsize sedan, a segment Mitsubishi hasn't been in since the departure of the Galant in 2012.
"When you're not building the vehicle yourself, now you have another company that needs to cover costs and profit," mentions Swearingen. "The margins clearly are challenged. If it doesn't make sense, we cannot afford to go forward with the project." Focus has shifted to a possible deal for Nissan to supply a mid-size offering, but talks are only in their initial stages, according to reports.
While the lack of a midsize sedan offering may hurt the automaker in the long run, Mitsubishi may be well served by focusing on its core sellers. The competitively priced Mirage has found a strong niche in the entry-level subcompact market, whereas the Outlander Sport capitalizes on the ever-expanding compact crossover segment, which according to KBB data grew a sizable 14.5 percent last year.
Despite having sold only 196 i-MiEV electric vehicles during 2014, Swearingen affirms that the numbers for the niche EV are still within Mitsubishi's global expectations and it will continue to play a part of the firm's product plan.
Death of the Evo, Rise of the Sporty Hybrid
To the chagrin of enthusiasts, the venerable Lancer Evolution will hang up its hat at the end of 2015 with Mitsubishi having no immediate plan to bring it back. As a send-off, there will be a final run of 1,600 Lancer Special Action Models boasting increased performance above the standard Evo X.
In place of a new Evolution model for 2016 and beyond, Mitsubishi is banking on higher-powered versions of its upcoming Outlander PHEV and perhaps a larger SUV with plug-in hybrid capabilities, as previewed by the GC-PHEV in Chicago. While the move risks alienating part of Mitsubishi's more traditional enthusiast crowd, the performance boost in the booming crossover segments could offer greater opportunities for growth.
"We do Owner's Days and a large number of Evo customer come for those, but when I talk to Outlander Sport and Mirage owners, the Evo just isn't that important to them," commented Swearingen. "Don't get me wrong, I don't want to lose those customers, we just think bigger opportunities lie in plug-in hybrid vehicles - we can still deliver the power, just in a different way."