Stopping the Slide: Mitsubishi's New Plan to Reverse Sales Decline

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Mitsubishi's U.S. sales have been slipping since 2007, and Osamu Masuko, president of Mitsubishi Motors, has a new plan to increase U.S. profitability through new model introductions, increased factory utilization, and a revamped dealership network.

Although the U.S auto industry experienced a sales increase of 17 percent so far this year, Mitsubishi saw no real increase, with 26,490 vehicles sold through June -- an increase of 23 units over June 2009. Its highest-selling model, the Lancer, has sold just over 10,000 units since the beginning of the year. This caused its market share to shrink from 0.6 percent to 0.5 percent, but Masuko remains upbeat. He believes the launch of the Outlander Sport this fall will boost Mitsubishi's annual U.S. sales higher than last year.

"This is an important year," Masuko said. "We have strong expectations for the U.S. market."

In addition to the launch of the new Outlander Sport, Mitsubishi will add at least two other models to its U.S. lineup by the end of 2012. Mitsubishi's i-MiEV electric vehicle is destined for U.S. showrooms in December of next year and its new global small car will arrive one year after that.

Mitsubishi also plans to lower its breakeven point for its sole U.S. plant from 100,000 to 70,000, but the plant is only currently on track to produce 27,000 vehicles this year. By the end of the year, the company plans to decide which vehicle to add to the production line to move the target back to 100,000. The Illinois factory currently builds the Eclipse, Eclipse Spyder, Galant, and Endeavor, and is capable of 240,000 units.

Mitsubishi has also struggled with its dealership network. It now has 397 dealerships in the U.S., down from 420 last year. "Some dealers have left, but others have joined," Masuko said, adding that Mitsubishi's U.S. dealership network has now effectively been reorganized.

Masuko believes these changes will help to bring Mitsubishi to an operating profit in the U.S. He said he hopes that Mitsubishi will sell 68,000 vehicles in the U.S. this year with the addition of the Outlander Sport, up from 54,000 last year. Masuko is also set to unveil a new global business plan later this year to increase global sales 54 percent to 1.5 million units by 2013.

What do you think? Will the changes and added product help bring Mitsubishi back to a profit in the U.S.?

Source: Automotive News (Subscription required)

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