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Hoping for a Hit
New products need to be hits for Mitsubishi to stay in U.S. market

AutoWeek | Published 05/30/06, 12:58 pm et
NAGOYA, Japan -- Maybe it was a surprising bit of candor. Maybe it was an attempt to light a fire under the sales staff. But at face value, it was a stunning statement:

If a new crop of redesigned models doesn't sell, Mitsubishi may pull out of the United States.

At a press event here last week, the parent company's top product development executive said the stakes for the redesigned Outlander, Lancer and other vehicles are enormous. The vehicles have "to be successful for us to stay in business in the U.S.," said Shinichi Kurihara.

The first of the vehicles, the redesigned Outlander, goes on sale this fall. They will be built on the company's new C platform, the first developed by Mitsubishi since its 2004 breakup with DaimlerChrysler.

Kurihara's words underscore Mitsubishi's precarious position in the United States.

Last year sales plunged to 123,995 units, down from 345,111 in 2002. Mitsubishi Motors Corp. has posted huge losses in recent years, and it must make every product-development dollar count.

Mitsubishi's assembly plant in Normal, Ill., operates on only one shift. That's a recipe for losing money.

Knows the market
Kurihara, 56, knows the United States well. From 1984 to 1988 he worked at Mitsubishi's U.S. headquarters in Cypress, Calif., studying U.S. consumer habits.

From 1996 to 2001 he was senior vice president of product strategy in the United States and was planning chief for the redesigned 2007 Eclipse Spyder that went on sale this spring.

He was in charge of the global compact segment before being named to his current job on April 1. He is corporate general manager of the product strategy office.

Kurihara's role is to assist U.S. CEO Hiroshi Harunari in bringing the proper product to this country.

"The U.S. is so important," Kurihara says. "We need to support Harunari. We believe Outlander will help us establish our image. We hope Outlander will bring new customers to our dealerships."
Sales fall 16.5%
Kurihara admits Mitsubishi's U.S. lineup is performing poorly. Through four months this year, sales fell 16.5 percent to 36,536 units.

"When we decided on Endeavor and Galant, we thought Mitsubishi was more upscale," he says. "But now maybe that is not so important."

He dismisses the Raider pickup as a "bad decision." The Eclipse is performing well, outselling the Endeavor and Lancer.

Mitsubishi sold 2,626 Eclipses in April in the United States, compared with 988 in the same period a year earlier.

He says the C-platform vehicles will demand attention with sporty good looks and innovative equipment.

The Outlander crossover has seven seats and more engine power than the current five-seat Outlander. It is powered by a six-speed automatic transmission, Mitsubishi's first, and a new 3.0-liter V-6 making 220 hp. It replaces a 2.4-liter, 160-hp four-cylinder engine.

Both all-wheel-drive and front-wheel-drive powertrains are available. An aluminum roof panel helps lower the center of gravity.

It will be the first Mitsubishi sold in the United States with a touch-screen navigation system. Bluetooth wireless technology, paddle shifters and in-floor third-row stowable seats also are available.

"Globally, Mitsubishi has enjoyed a strong reputation as an SUV manufacturer," says Kurihara. "We hope to re-establish our SUV image in the U.S."

Mitsubishi wants to sell at least 4,000 Outlanders monthly in the United States. It sold 811 Outlanders in April.
Dealers want more ads
Mitsubishi in Japan says it plans to raise its U.S. incentive spending by 10 percent in the fiscal year that began April 1. The company will spend $3,000 per vehicle, up from $2,700 per vehicle in the fiscal year that ended March 31.

Miami dealer Bill Seidle says good product alone won't do it. He says Mitsubishi needs to open its purse and advertise.

"We have some of the finest automobiles in the U.S., such as the Eclipse and Eclipse Spyder, but nobody knows about them," Seidle says.

"I don't think they have enough funds to spend in the U.S. As a franchise, we're not moving and shaking."

Mitsubishi's product development boss Shinichi Kurihara is counting on the redesigned Outlander to jump-start U.S. sales.
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