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Sunday, April 17, 2011

Mitsubishi Motors- How to sell good products badly.

Mitsubishi Motors is the sixth largest Japanese car manufacturer worldwide mostly known for its Lancer and Pajero cars. But since the dawn of the 21st century Mitsubishi has struggled worldwide to get acceptance in the market and sales have been minimal. Mitsubishi which has a more than 90 years of successful car building history starting from the Fiat Tipo based Model A has more than tradition and history going in its favour.

That doesn't deter the fact that Mitsubishi's new car releases are still waited for with abated breath. Their racing and rally heritage is unchallenged and their engines and build are still one of the best. This is definitely a rare feat considering the huge cover-up scandal Mitsubishi was engulfed in 2002.


Most car companies falter when their think tanks cannot come up with a universal plan. Ford Motor Company before and Ford Motor Company today is the best example to name. Mitsubishi has the right models in its portfolio but they chose the wrong markets, advertising strategy, partners and shelf space.

To begin with, Mitsubishi Motors in India has had a downfall in the 13 years of its operations. What started as a paramount success run turned to fizzle after a couple of years. Even new models could not help jump start the once burgeoning business. A politically sick Partner in HM, A relic model portfolio and indifferent dealership attitude are to blame.


Mitsubishi Motors in North America again had a sound start with Chrysler rebadging their cars for sale. The 2002 Scandal was a life threatening scare but new competitive models did help to an extent. Wrong Market reading and poor marketing and awareness are giving Mitsubishi Motors North America Sleepless nights. Mitsubishi UK fares slightly better with the FQ series and the i mini. But the results are not very cheerful in Europe either.


So what exactly went awry? Mitsubishi has been selling the Galant/380 name tag since 1969. The Galant gave Mitsubishi the much needed big car then. Unlike the Camrys, Accords and Maximas, the Galant had more of the American Muscle look. But while the ninth generation car had everything to be a success, it bombed. Even in the Australian Market the 380 was dropped. Mitsubishi did introduce the car to Taiwan and China but missed the opportunity to launch it in India and Malaysia. The Galant is not present in Germany, Korea, Brazil or India where big cars bring equity and awareness to the company. The PS platform which forms the basis for the Galant does not support Rear wheel drive but the 4g69 and 6g75 pack enough grunt to keep the car up against competition.



Coming to the lancer, Mitsubishi through its subsidiaries is currently selling three different versions of the Mitsubishi Lancer worldwide. This leads to inefficient use of resources and reduction of profitability due to economies of scale. Honda has introduced a mini Civic for the Asian market named the 'City. Nissan has a mini Altima named the 'Sentra' and Toyota has the recently introduced the Vios/ Etios. Mitsubishi has a lost opportunity in using the Eighth generation lancer as the Mirage or Cedia to fight at the lower end of the market while the Lancer gets a freehold at the higher end against the likes of Corolla, Civic and Altima. At the same time the seventh generation lancer needs to be stopped from production as it only leads to corrosion of the brand image.


 Considering Mitsubishi Motors globally has only made losses in the last decades, funds are definitely tight. This hampers new platform designing and conceptualization. Here the company has overlooked a very important platform share design. The Lancer coupe/ Convertible can be added to the sedan and sportback cars. Many might argue that a lancer coupe/convertible will eat into the Eclipse sales. The Mitsubishi Eclipse is based on the larger PS platform on which the Galant/380 is also based. For a company known for fun to drive cars, such a model will only cement its success further. Platform sharing will help keep manufacturing costs down helping improve profitability. Mitsubishi did have a coupe based on the seventh generation lancer.





The Lancer Sportback on the other hand needs more visualization globally as many are not aware of the cars existence even in the markets it is sold. Such platform sharing  designs are already present at VW, Suzuki, Toyota, GM and Chrysler so Mitsubishi has a tried and tested plan at hand.




Mitsubishi needs to bring in the Mitsubishi I mini car to North America ASAP as the time is right. Fiat has just launched the 500 and Ford is selling the Fiesta hatch. Bringing in the 'i' will bring customers to the showroom. Stating the fact that Mitsubishi i is the most awarded Mitsubishi in sometime will only strengthen matters. The Americans have learned that big egos and big cars are bound to fail and hence the time is right to strike the iron while its hot. The 'I' MIEV will also complement the petrol version.

In fact, so strong is the 'I's need for Mitsubishi that the company needs to launch the car worldwide as a special edition car. Such as move will work as a brand marketing exercise for the company yearning to build its reputation.

Killing the Ralliart made sense at Mitsubishi amid mounting losses and the pressure of economies hit by recession. But the equity of the brand Ralliart is strong enough to not let it die. AMG for Mercedes, Nismo for Nissan, Mugen for Honda and SRT for Dodge are some of the famous examples. Mitsubishi has also failed to encompass its other models under the Ralliart name successfully apart from the Lancer.

The same also applies to the Evolution portfolio. The portfolio ends with the Lancer and Pajero. I am sure those who swear by the Lancer EVO FQ-400 would love to get their hands on a performance Eclipse Evolution FQ-500 or a Colt Evolution by Ralliart smoking dirt at much powerful sports cars.


Peugeot Citroen is the sixth largest Car maker in the world and the second largest European car maker. Many of their models are re badged Mitsubishi cars including the successful Outlander. Also Mitsubishi and Peugeot Citroen are collaborating on their next generation electric car. With such strong ties the company should look at platform sharing for their newer sedans saving R&D and production costs. Under the circumstances where Mitsubishi is considering cancelling the PS platform Mitsubishi can look to share the Peugeot RCZ  platform sharing for its Eclipse and mid-size sedan models.


Coming lastly to the model that Mitsubishi can bank for volumes is the Colt. Japanese are not known for their diesel engines unlike the European counterparts. The Colt needs a diesel and introduction to a diverse market as small cars are a rage today. As of today the Colt is not present in China, America, Korea, Brazil, India, Mexico, Canada and various other major car volume countries.

Looking at the number of Car companies in production, Mitsubishi needs to take some corrective step soon or fear getting lost into the oblivion which would also mean existing only in the books of history.

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