Make it or Break It: Mitsubishi Positions Itself for a Comeback
Is it a drive for growth or a drive for death?by Robert Moore, on
“Drive for Growth.” It’s Mitsubishi latest plan to effectively turn the company around following its fuel economy scandal of yesteryear. The basic concept is to increase sales by 30 percent while at the same time increasing profit margin by six percent and research and development spending by ¥600 billion. This would, according to Mitsubishi push annual sales up to 1.3 mill units and revenue as high as ¥2.5 trillion. And, it plans to do so by strategic market expansion and by improving overall operating efficiency. For starters, Mitsubishi will work on improving U.S. dealerships while increasing the number of dealers in China by 110,000 to 220,000 total.
The big news here is that Mitsubishi is announcing that it will launch 11 new models over the next three years, with six of them being completely new models. The remaining five will be major updates to current vehicles on the market. By the end of 2020, Mitsubishi expects 70 of its sales volume to come from its SUVs, 4WD vehicles, and plug-in hybrid vehicles. There’s also word that there will be electrified solutions across the “core model range” which includes an EV kei car in the year 2020. So, in other words, Mitsubishi is going to spend a ton of money on R&D, even more money building and optimizing dealerships, and somehow manage to grow its bottom line. It sounds really good on paper, but will it actually work? Well, I have a few thoughts on that, so keep reading to find out.
This Could be the Beginning of the End
The basic concept is to increase sales by 30 percent while at the same time increasing profit margin by six percent and research and development spending by ¥600 billion
Mitsubishi has had a pretty tough time lately. The whole fuel economy scandal turned out to be a company-wide failure with fault going to more people that you can count on four hands. Low-level management had it wrong, corporate management had it wrong, employees were discouraged from expressing concern or challenging authority even if it was right to do so, and different divisions had no unity. The worst part of it all, however, was everyone’s inability to accept fuel economy shortfalls, and without a way to make it better, numbers got padded. In short, the entire situation was a massive disaster just waiting to come down on someone’s head, and come down it did.
Now, we’re looking at a brand that was so busy cheating its way into government approval that it let a car like the Lancer die an undeserving and unwarranted death after being seriously neglected more than a decade. The EVO program is also dead along, which pretty much brought an end to anything cool that came out of Mitsubishi’s stable. And, to top things off, the brand is slandering the Eclipse name by using it for a freaking crossover/SUV instead of a sports coupe like it should. To make matters even worse, there are rumors that the EVO program could come back as a program limited to SUVs.
Oh… poor, poor, Mitsubishi. What are you thinking? This brand needs some serious management changes, and some young blood injected into its core. Jumping onto the SUV bandwagon, Mitsubishi’s new primary focus, is too little, too late, and now the brand is going to pour all this money into developing what I only assume will by 6 new SUVs because lord knows that trend is never going to die off – NOT!. So what’s going to happen? Well, I have a feeling that the brand is going to bring a bunch of new SUVs and Crossovers to the market and by the time its new push for a comeback is over, so will be the SUV craze.
This brand needs some serious management changes, and some young blood injected into its core
I’ve been predicting the end to the SUV craze for a while now and, while I could be wrong, I have a feeling that Electric cars are going to be the next big thing. Sure, we’ll get all-electric SUVs, but their sheer weight will be a bit of a problem for a while until we can really improve our battery technology – or at least bring solar charging onboard in a big way. So, even if Mitsubishi does end up with a lineup full of SUVs that it can’t sell, with any luck the EVO SUV models could provide some leverage as long as they are done right (sporty and plenty of power) and if it continues its push for PHEV and ventures into true EV vehicles.
Unfortunately, one just has to be skeptical at this point, because it really seems like the shot callers over at Mitsubishi aren’t sure about what they are doing. And, while all of their “Drive for Growth” strategy sounds good on paper, I’m afraid it’s not going to be anywhere near as easy as it sounds. But, we shall see. What do you guys think? Is Mitsubishi finally on the right path? Does it need some younger blood? Hit us up with your thoughts in the comments section below.
Read more Mitsubishi news.