Thursday, 19 October 2017

More Rehab Than Recovery: Mitsubishi Has a Plan to Reverse Its Long Decline

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Mitsubishi e-Evolution Concept - 2017 Tokyo Motor Show

Still having trouble understanding why and how Mitsubishi kicked its Lancer Evolution (the Evo!) to the curb two years ago? We are. And the rest of Mitsubishi’s Lancer lineup says sayonara this year, joining the likes of other once strong nameplates such as Eclipse, Galant, and Montero in suspended animation.

Mitsubishi Motors hasn’t just been in the doldrums in the United States, but globally. Now, after years of what can be best described as managed decline, the company has a long-awaited big-picture plan—one that promises a product renewal with 11 fresh vehicles, six of which will be entirely new. The automaker plans to offer electrified powertrains across the core model range—with technology and electric-vehicle expertise likely coming from Nissan.

The closer ties to Nissan are critical to the recovery plan. In 2016, Nissan took a controlling 34 percent stake in Mitsubishi Motors, making the embattled automaker the third member of the alliance between Nissan and Renault that began back in 1999. Last month, the Renault-Nissan-Mitsubishi group released a six-year plan to launch a dozen new fully electric models and 40 new vehicles with autonomous-drive technology. Under that plan, more than nine million vehicles across the three automakers will share four common vehicle platforms, and 75 percent of total sales volume will use common powertrains.

Mitsubishi’s Chance to Get Its Mojo Back

Under the Mitsubishi plan, called Drive for Growth, the company will increase its spending (including R&D) by $5.3 billion over the three-year period. Because of synergies from the Renault-Nissan-Mitsubishi alliance, the automaker hopes to save $885 million. Mitsubishi, which has found sustained sales success with its Outlander plug-in hybrid in Europe, intends to “contribute its expertise in PHEV technology, its capabilities in SUVs and pickups, and market strengths in the ASEAN region to the wider synergy program of the Alliance.” The automaker points to the Xpander, a people mover for overseas markets, and the upcoming Eclipse Cross (shown below),  which will go on sale early next year in the United States.

2018 Mitsubishi Eclipse Cross

We expect Mitsubishi Motors North America to follow up with more U.S.-specific details in coming months. The plan targets a 30 percent gain in sales both in the United States and worldwide, to 130,000 U.S. sales and 1.3 million globally.

Mitsubishi has a lot of work to do at the showroom level. It remains far from the 345,111 annual U.S. sales peak it achieved 15 years ago. The Mirage has been “a critical flop but a reasonable commercial success,” as we’ve phrased it. Pushing further into the bargain basement won’t do the company any favors; but as for returning some of the technology luster the brand used to have, well, it’s better late than never.

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