Mitsubishi Motors’ North American operation is struggling; the manufacturer sells far less than any other Asian car company in North America. The next smallest Asian Manufacturer, Mazda, sold almost three and a half times as many automobiles in April of 2014. Only six other manufactures have sold fewer cars than Mitsubishi in so far in 2014. Only Volvo sells vehicles to call average consumers. The other five are, from most sales to fewest, Jaguar/Land-Rover, Porsche, Tesla, Maserati and Ferrari.
There are some positive signs for Mitsubishi in the midst of their market slump: April Sales are up 46.6% over 2013 and year to date sales are up 29% over 2013. Only Maserati had a larger percent increase year over year, but they sold 753 vehicles last year, so their increase is magnified by the minimal 2013 sales. On the other hand, among manufacturers building cars for mainstream customers, Mitsubishi also sells an incredible small number of vehicles, so its percentage increase in sales is also inflated by the dearth in sales from 2013. Mitsubishi has been improving its North American operation going back several years, increasing North American net sales by 53% from 2012 to 2o13 according to the completed 2013 fiscal year Financial Statements.
Whether or not Mitsubishi will be able to mount a comeback from the brink of complete and utter failure in North America will depend heavily on the continued expansion of the vehicle market. There were 1.8% fewer cars sold in North America compared to this same point in 2013, but summer sales are expected to be substantial enough to grow the car market in 2014 over 2013. The light truck and SUV markets are up 15.4% and 10.1% respectively. As the overall market grows Mitsubishi will have an opportunity to increase its market share and its image, but if the car market stagnates or shrinks, Mitsubishi will likely see its sales cannibalized by the other automakers and go the way Suzuki motors, which has completely withdrawn from North America.
Sources: www.motorintelligence.com and www.mitsubishicars.com. Market share graph on right added by the Prof.
It would be interesting to know on the pie chart what percentage of the market that the Asian car companies control. Not only would it put the Mitsubishi market share in perspective, but it would tell you what the potential is for Asian cars. The higher the percentage of Asian cars controlling the market, the better chance Mitsubishi has to succeed. Mitsubishi would have a much easier time overtaking another asian car company rather than an American car, mainly because the Asian cars share the same concept, they are meant to be appliances.
As Toshi Amino noted at our lunchtable in Ohio, the Marysville plant ranked equal or higher in quality on internal audits than Sayama in Japan, but in the early years American consumers wanted a “Made in Japan” vehicle.
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While the location of a firm’s HQ may have mattered at one time, do consumers know (much less care) that MMC is a “Japanese” company? Or that the vehicle is an import from inside of NAFTA, or from Japan / Korea / Europe? I doubt that’s the case today, though in the end it’s an empirical question.
As to “Japanese” market share see the graph I included.
See my thoughts on MMC here: Mitsubishi Motors: going, going … gone?
I do not see Mitsubishi making much of a resurgence in sales here in North America. The number of dealerships around any one geographic location is much lower than its competitors, and this only mimics the pattern of low sales volume. The cars that Mitsubishi is currently making, to put it simply, do not fit the consumer preferences of the modern North American. In my opinion, Mitsubishi needs a serious rebranding because its public image is one of cheap, ugly, and obsolete vehicles.
I think an important reason that Mitsubishi is making profit right now is their new Mirage, which is a reliable, affordable, and fuel-friendly vehicle. I am personally very fond of the brand because their good desgins. Although it is pretty easy to get an operating profit from cutting backs and fewer newe investments, I still think Mitsu has the potential to compete in light vehicle sector in the future with Mirage as a good start. They also need to deal with their dealership issue in North America.
Isn’t it the weak yen? It was ¥75 per dollar, now it’s ¥101 / US$. That’s a huge benefit to exporters.