Parent company struggles while Mitsubishi of America rebounds

After a couple of bad years, 1999 has been good for Mitsubishi Motor Sales of America. Ironically parent company Mitsubishi Motors Corp. remains a chronic victim of the Asian financial crisis and sluggish sales back home in Japan.

At this time last year, Pierre Gagnon, executive vice president and chief operating officer for Mitsubishi Motor Sales of America Inc., vowed that, to become profitable, Mitsubishi would change the way it did business. It did.

It is trying to adopt a clear brand image with its "Driving to Win" campaign. It vows to give dealers more say about the vehicles that come to their showrooms. It's continuing to introduce new products to keep the momentum going.

"It's been quite a year What a difference a year makes," Mr. Gagnon says of the company's record year in 1999. "It's been our best year ever."

He attributes Mitsubishi's success in 1999 to a variety of things, including the momentum the restyled Galant sedan started building in 1998.

"We've seen a tremendous spike for that car," Mr. Gagnon says.

Overall, U.S. sales are expected to reach 230,000 units for 1999, an increase of more than 38,000 over 1998's 191,515 units sold.

The company, which struggled to break even just two years ago, sold more vehicles by October 1999 than it did in all of 1998.

The launch of the all-new 2000 model led Eclipse sport coupe sales to 5,464. Mr. Gagnon says the success of the Eclipse had a domino effect on sales of the company's other vehicles, as every vehicle saw an increase in sales.

"We're seeing customers we've never seen before," he says. Mr. Gagnon attributes that in part to a great economy and the affordability of today's vehicles. Mitsubishi name recognition and its products also are at an all time high.

"Brand awareness has gone up 20% in the last six months, alone," he says. "In the past, people might have known Eclipse, but they didn't know Mitsubishi. Now they are able to say an Eclipse is made by Mitsubishi."

Mr. Gagnon credits an aggressive and consolidated advertising campaign for the increase in name recognition.

In 1998, MMSA had 11 or 12 advertising associations. At the beginning of 1999, that numbers rose to 40. Now it's 135.

Mr. Gagnon says, "We have a lot more presence. But we are still trying to raise awareness about Mitsubishi, as well as our products. We are not backing down on advertising at all."

He says it won't be hard for MMSA to continue riding the wave. "No CEO in the industry is going to predict a decrease, but we are looking for a strong economy in 2000 and a strong car market," he says.

Mitsubishi will debut its new Eclipse Spider in March. The full-sized Montero will debut in April. Meanwhile, a re-priced Diamante also should bring in customers, Mr. Gagnon says.

He says dealers will be getting in on the action with showroom initiatives, which were piloted in December.

"We are continuing to improve our retail process, from the prospecting side, to the showroom experience to the service experience," he says.

MMSA also will launch a new image for its stores with new signs.

Mr. Gagnon credits a program MMSA launched in July with making the company more efficient and more buyer and dealer friendly. Rather than letting imported vehicles sits in dock warehouses around the country, the company is using its own form of "just-in-time" deliveries. As soon as vehicles are loaded off the ships, they're sent to dealers.

"In the past we ordered vehicle supplies, and hoped that the dealers would take and sell them," Mr. Gagnon says.

Dealers now have more say in which vehicles make it to their showrooms. Mr. Gagnon says the company also launched a user-friendly ordering system on the Internet.

"We've done all of this very very quietly. But we're noticing a big shift," he says.

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