Blog

This article by John O’Dell of The Los Angeles Times appeared in the Sunday December 3 edition. AutoPacific‘s George Peterson is attributed extensively in the article.
Mitsubishi hopes new Lancer gets it back on track

The redesigned compact is seen as crucial to the struggling automaker’s U.S. recovery efforts.

By John O’Dell, Times Staff Writer
December 3, 2006
Mitsubishi Motors Corp., once a shooting star among the smaller Japanese automakers fighting for space in the U.S. market, needs a hit. Badly.
The company, beset by problems here and at home, has seen its U.S. sales plummet 64% from their high in 2002.
Renowned at one time for cutting-edge design and technology, Mitsubishi was among the first automakers to use four-wheel steering and to offer a convertible sports car with a retractable hard top.
It pioneered the direct-injection gasoline engine, for more power with increased fuel economy; and active “yaw,” or body-roll, controls that keep a vehicle from pitching uncomfortably from side to side on curves.
These days the company is better known for cheap loans and woeful resale values.
“It’s a shame, because they’ve always made good cars,” said industry analyst George Peterson, president of market research firm AutoPacific Inc. in Tustin. “But they lost their image.”

Hiroshi Harunari, president and chief executive of Cypress-based Mitsubishi Motors North America, believes that is about to begin changing.
The company is preparing to introduce a new version of its Lancer compact, a car that it hopes will appeal not only to mature buyers seeking affordable, fuel-efficient transportation but also to younger enthusiasts familiar with the Lancer’s storied roots in World Rally Cup racing.
Mitsubishi’s dealers certainly hope so.
“If this car doesn’t succeed, you’ll have to question the company’s ability to succeed in the U.S.,” said Tom Coxton, owner of Huntington Beach Mitsubishi.
His stand-alone franchise “is barely hanging on,” Coxton said. Sales are averaging 20 cars and trucks a month this year, about half his 2005 volume.
Nationally, Mitsubishi dealers are selling 19 new vehicles a month on average, compared with 32 a month through October for rival Mazda Motors Corp. dealers, who target the same performance-oriented, youth market that has been Mitsubishi’s core.
The new Lancer — lower, wider and more powerful than the current model, which sells for $14,600 to $20,000 — is scheduled to be unveiled in January at the North American International Auto Show in Detroit.
It will go on sale as a 2008 model in late March or early April, Harunari said.
He sees the new car as crucial to Mitsubishi’s U.S. recovery efforts and to its global effort to repolish an image tarnished in recent years by huge losses, quality-control scandals in Japan and a disastrous cheap-loan program in the U.S.
The latter brought a batch of buyers with poor credit records who eventually cost the company a few billion dollars in loan defaults.
Mitsubishi won’t discuss particulars of the new Lancer or the marketing plan behind it, but analysts and dealers say U.S. sales will have to reach or exceed 50,000 a year for the car to be considered a success.
The automaker, strapped for cash for several years, is going to have to loosen the purse strings to market the car if it hopes to rebuild its presence in the U.S. market.
Bryan Arnett, head of Mitsubishi’s compact vehicle programs in North America, would say only that the company “will spend sufficient dollars” to sell its Lancer message.
The company’s future depends on that, Coxton said.