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Mitsubishi Australia sets 10 per cent growth target

Sports star: Mitsubishi Motors Australia Limited (MMAL) president and CEO, John Signoriello says the Pajero Sport can do even better when it comes to sale.

Another small SUV wanted but Pajero likely out of Mitsubishi future

Mitsubishi logo12 Jun 2017

MITSUBISHI Motors Corporation (MMC) chief operating officer Trevor Mann has praised the sales performance of Australian management and dealerships in light of the brand’s ageing line-up, setting a 10 per cent sales growth target for the local outfit to achieve within three years.

The former global Nissan performance officer – who was appointed MMC COO by Nissan chairman and CEO Carlos Ghosn upon the takeover of the fellow Japanese brand last year – has also admitted that Mitsubishi is a stronger brand than Nissan locally, which will continue to build “sales momentum” going forward.

“As you know, we are a much stronger brand in Australia than Nissan and clearly as a group of individuals, we want to keep it that way,” he told Australian media at an event in Sydney last week, before praising Mitsubishi Motors Australia Limited (MMAL) management.

“We’ve been very fortunate. Some of the sales momentum is based on heritage, some of it is based on the hard work and commitment of the Mitsubishi team and what I think is an excellent network of dealers and investors that make sure that we make the best out of what we’ve got.

“I was here in March (2017) and we had a review and I challenged (MMAL) a little bit. We put together a bit of squeeze on what the local team had originally proposed, but they put together a good plan.

“We’re expecting to grow this year, not only in volume but also in terms of market share. We’re expecting to grow 10 per cent over the next three years (and) I’m expecting to take much of that step over the next year.”

Last year Mitsubishi sales were steady in Australia, with 2.3 per cent growth to 73,368 units.

It came on the back of improved volume of the lightly facelifted ASX (up 33.7 per cent to 18,126 sales) and Outlander (rising 13.9 per cent to 12,401 units), while the new Pajero Sport managed to nearly double the sales of its Challenger predecessor with 6238 sales versus 2741 (and 496 for Pajero Sport) in 2015.

Such gains were, however, largely offset by Mirage (down 21.1 per cent to 3064 sales), Lancer (falling 14.7 per cent to 7272 units), Pajero (down 19.8 per cent to 4049 sales) and Triton 4x2 and 4x2 (each falling by 13.5-13.6 per cent to 3928 and 17,969 units respectively).

Mitsubishi has fared better this year according to VFACTS May 2017 results, however, rising 6.5 per cent year to date.

The drops have softened for Mirage (down 8.1 per cent) and Lancer (falling 4.7 per cent) while Pajero Sport is heading for a record haul, based on current monthly averages, and Outlander has soared by a massive 41.1 per cent.

The expected volume boost will be driven by the addition of the coupe-style Eclipse Cross small SUV later this year, which will nestle between the ageing ASX, and the Outlander, Pajero Sport and Pajero in the Mitsubishi line-up.

Asked if there is scope for yet another SUV in the range, in particular a model smaller than the ASX (which currently retails from around $25K) to rival the Mazda CX-3 (which starts from circa-$20K), Mr Mann replied: “I think there is.

“And that’s what we are considering in terms of our future product plan.

Obviously the world is gravitating towards SUVs and segment by segment the SUVs are growing so I think that’s something that we will look at and embed in our plan,” he added.

While MMC deliberates on a passenger car plan and potential replacement for the Lancer (see separate story), a smaller model could step in as a small car alternative to the ageing sedan range. But where the Pajero Sport is a relatively fresh addition, the news is not sound for the much older, one-size-larger Pajero.

“I think it’s in the balance, I think it’s 50:50,” Mr Mann said of the Pajero’s future.

“We haven’t announced end of production for the current Pajero (so) it will continue. That segment, globally, is dying and it’s being killed by emissions.

So, if you look where the critical mass of where those volumes have been (it is) in the US and the Middle East.

“Recently, the Middle East has collapsed quite a bit (and) I think the total industry volume has been down by about 25 per cent since the oil crisis. Also, some of those countries, especially Saudi Arabia, have been cracking down on emissions so it’s becoming quite prohibitive to sell such large vehicles.

“What we do in the future is a question. I’m not sure that will be announced in October because I’m not sure that we will have squared that circle by then.”

Mr Mann revealed that a mid-term – for the next three to six years – plan will be revealed in October, with the first Renault-Nissan Alliance-based Mitsubishi due to go on-sale in 2020 (see separate story).

It will not, however, likely be a Pajero based on the Nissan Patrol.

“The two are quite different vehicles as you know, the Pajero is smaller, the Pajero is a monocoque, whereas the Patrol is body-on-frame and much larger,” he added.

Asked whether it was a bad look for Mitsubishi to continue with such old and potentially uncompetitive vehicles in its line-up such as Lancer and Pajero, Mr Mann said: “I guess so, and this is the balance that you need to take.”“As you know, a lot of people talk about the Pajero and that’s a good thing and I think that’s the advantage of that type of vehicle,” he continued.

“Obviously the technology can be outdated but the style of the vehicle and the people that buy them, apart from the what they expect of the vehicle in terms of off-road ability, they like the square and boxy look.”

Mr Mann accepted, however, that Mitsubishi performed most strongly in South East Asia including Australia, and he insisted the company would most listen to the requirements of these markets to guide its future product plan.

“(Australia is) performing much better than the average performance in terms of the profit-to-volume ratio, so this is why it needs to be one of our focuses of attention over the coming years,” he said.

“If we look back at our strength – Australia, Thailand, Indonesia, etc – is really our bedrock so we can’t afford to let that crumble. It’s got to be the focus of our attention and we’ve got to make sure we don’t let it drain, rather support the brand where the brand is strongest and generate the highest profits.”

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