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Mitsubishi digs in as car market falters

Smart decision: Being an early adopter of Android Auto and Apple CarPlay smartphone connectivity has paid dividends for Mitsubishi Motors Australia.

Careful consumer, product and cost analysis to help MMAL resist car market decline

10 Dec 2019

RIDING high as second highest-selling car brand in Australia after Toyota in November – up from sixth in October and fourth a year ago – Mitsubishi Motors Australia Limited (MMAL) attributes its solid performance in a declining market to “doing well at what we can control”.


Mitsubishi sales are down 1.9 per cent in year-to-date terms and last month’s performance was down 1.3 per cent compared with the corresponding month last year, but the triple-diamond brand has upped its market share from 7.3 per cent to 7.9 per cent in the same timeframe.


This was achieved – despite an ageing model line-up – by not slipping as far or as fast as the overall market – down 8.2 per cent YTD – or other top-five players such as Hyundai (-8.7% YTD) and Mazda (-11.2%).


Runaway leader Toyota is down 6.3 per cent, selling 12,613 fewer vehicles than at this point a year ago but still with a commanding market share, up from 18.9 per cent this time last year to 19.3 per cent today.


In February, having bucked last year’s 3.0 per cent market decline with 5.3 per cent growth, MMAL president and CEO John Signoriello told GoAuto he was hoping for another recordyear with more than 85,000 units sold.


However, speaking with GoAuto at the MY20 Outlander PHEV launch in Canberra last week, Mr Signoriello admitted this was no longer feasible.


“We’ll probably hit around the 80,000 mark by the end of the year,” he said.


“We’ve just got to focus on keeping our costs under control and delivering what the customer needs.”


More positively, Mr Signoriello acknowledged that a deliberate shift in focus toward SUVs and utes had helped absorb the impact of Australia’s plummeting passenger car segment.


“It was our strategic plan three years ago to take the focus away from passenger cars and in the current environment it was probably a reasonable plan,” he said.


Mr Signoriello’s broader strategy for combating what he described as “difficult” trading conditions centred on “doing well at what we can control in the current environment”.


This includes closely analysing and responding to consumer demands and trends – such as Apple CarPlay and Android Auto smartphone connectivity – with regular running changes to popular models, offering a streamlined line-up of variants and keeping an eye on overheads.


Mr Signoriello agreed that the latter was becoming even more challenging as the Australian dollar weakens against the Thai bhat and Japanese yen.


“It creates cost pressure, so we’ve just got to manage it very carefully and go to a different level of analysis when we look at product-by-product,” he said.


“We’ve got to get the basics right now when things are difficult and set ourselves up so that when the market does improve, and the exchange rate gets better, we’re in a position to take advantage of it.


“It’s having a strong cost base when times are difficult to absorb some of the pressure and set yourself up for when times get better.”


From a product perspective, Mr Signoriello said recent updates to the Triton ute, Eclipse Cross compact SUV and Outlander mid-size SUV, plus a facelifted ASX small SUV with new engine choices, had all helped.


And he is optimistic about the redesigned Pajero Sport large SUV and Mirage micro car that will launch in the first half of 2020, followed by the Express van mid-year.


“Some of the minor model-year changes have been significant enough to create a point of difference for us,” he said.


“I think the key is a very strong product plan, taking advantage of changes as they come through ... it comes down to focus and the level of analysis we go through with product to work out what the consumer is looking for and how we continually refine and add some features into the vehicle to keep it refreshed."


MMAL senior product strategy manager Owen Thompson added that a straightforward variant line-up for each model was also helpful.


“There’s a lot to be said for keeping your model range structured and quite tight; people understand it,” he said.


“If you’ve got this blunderbuss of models, people get confused – both customers and salespeople – but if you keep the message really clear and succinct, everybody understands it.”


Mr Signoriello remained positive about the future and was philosophical about how MMAL will navigate the downturn while keeping itself and its dealer network profitable.


“Things keep changing and will get better at some point; the question is when,” he said.


“What’s important to us is that we get our fair share of what’s out there and that in getting our fair share we’re profitable – and that our network is profitable.


“We focus a lot on what our network needs; our network is basically our arms and legs.


"We have a very mature network and ensuring they are profitable in the current environment is extremely difficult.


“It’s incredibly competitive out there (but) you can’t worry about what everybody else is doing.”


When it comes to the other major players, Kia is the only top-10 brand to truly buck the market decline, up 3.6 per cent YTD, while Holden has plummeted 28.5 per cent, Subaru is 20.2 per cent in the red, Honda is down 15 per cent, Volkswagen has shrunk 12.4 per cent and Nissan has slumped 12.3 per cent.


Ford has gone backward by 8.4 per cent.


Mr Signoriello said MMAL’s response to any further deterioration in market conditions would be “going to another level of detail when we need to as things get tougher”.

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