‘Japan’s BMW’ Targets U.S. : Mitsubishi, long known for its sporty cars in most other nations, is set to raise its image here.
Mitsubishi ranks among Japan’s four largest auto makers. And for years, consumers in Europe have regarded Mitsubishi cars as the Asian equivalent of the BMW: stylish, sporty, even sophisticated.
Until recently, mention the Mitsubishi name to American consumers, and they were as likely to think of electronics or banking as automobiles.
“In Detroit, people have never even heard of Mitsubishi,” said George Peterson, president of Auto Pacific Group, a Newport Beach automotive consulting firm. That may be a slight exaggeration, but in an age when Hyundai quickly became a household word in the United States, recognition of Mitsubishi’s arrival so far has spread more slowly.
Last year, Mitsubishi Motor Sales of America ranked a lowly seventh in U.S. sales among 10 Asian auto makers and had less than three-quarters of 1% of the U.S. market. But in 1989, it hopes to capture the attention and sales that so far have proven elusive.
With a new manufacturing plant in Illinois, a big new advertising campaign that features Los Angeles Dodger Orel Hershiser and rave reviews for its newest models, Mitsubishi figures that a turnaround is at hand.
In January, Mitsubishi’s first U.S. manufacturing plant began turning out the firm’s best-selling car, the sporty Eclipse, overcoming a shortage that once choked growth. The company has doubled its network television advertising budget and boosted its total ad budget to $80 million--a 35% increase. And the auto maker plans to add 85 dealerships in 65 new markets this year, for a total of 350.
“Our plan is to expand the exposure of Mitsubishi to America’s heartland,” said Jeanne Hoover, Mitsubishi’s manager of promotion and merchandising. “That means to have consumer recognition, and it may eventually mean 475 dealerships.”
The push couldn’t have come at a better time for Mitsubishi. Its Galant sedan has been named import car of the year by Motor Trend magazine, and all four of the company’s other new cars have won awards in categories like “best buy” or one of the “10 best.”
Hershiser is the pitchman for Mitsubishi’s “Five-for-Five” television and radio ads that promote the company’s five award-winning models. The Cy Young Award winner was signed in December as a spokesman for Southern California dealers. Now the firm is considering making Hershiser its national spokesman and part of its effort to establish its name in Iowa and Indiana, as well as California and New York, where up to now most Mitsubishis have been sold.
“This is our window of opportunity. There’s no fluke about it, and we’re telling everyone,” said Bruce McRitchie, executive vice president of Grey Advertising, which has created the award-centered campaign.
Well Known Elsewhere
In other parts of the world, Mitsubishi’s name is nothing new. In 1987, Mitsubishi Motors Corp., the parent company, built 1.2 million cars in Japan, or 10% of all cars made there. In Japan, Toyota and Nissan are the largest auto makers, while Mitsubishi and Honda scrap for third place.
And Mitsubishi was a big seller in New Zealand, West Germany and Finland before it ever began selling cars in America.
“When Mitsubishi first appeared in England in 1975, it was the BMW of Japan. Everyone knew Mitsubishi made fine cars,” said John Rettie, an editor at J. D. Power & Associates, an Agoura Hills auto consulting firm.
While Toyota, Nissan and Honda jumped into the U.S. market by establishing their own distributor network in the early 1970s, Mitsubishi chose a different strategy: It sold its cars to Chrysler.
That meant that Mitsubishi was earning revenue in the United States but gaining no name recognition with consumers. One-fifth of Mitsubishi Motors Corp. is owned by Chrysler.
Mitsubishi Motors holdings include 15% ownership of Hyundai, and 19% of China Motor in Taiwan.
Mitsubishi Motor Sales of America, the U.S. marketer and distributor of Mitsubishis, began selling cars in America in the final months of 1982.
Took Much Patience
Last year, Mitsubishi’s domestic sales were only one-tenth those of Toyota. And Chrysler, which since 1970 has sold Mitsubishis under its name, sells many more of the models than Mitsubishi Motor Sales. For instance, the sporty Mitsubishi Eclipse is sold as the Plymouth Laser by Chrysler.
“When we started in 1982, we knew it would be tough. We knew we were late. It’s taken a great deal of patience,” said Dick Recchia, Mitsubishi’s executive vice president. In 1983, 32,755 cars were sold, and annual sales had climbed to just 49,439 by 1986.
With 70 dealers in 1982, the company didn’t make the instant splash that low-price South Korean auto maker Hyundai made when it came to the United States in 1986 and opened hundreds of dealerships that sold more than 150,000 relatively low-priced cars.
“We had an entire line of cars to establish here. We planned moderate growth because we knew it would take years to obtain the supply and recognition we needed,” Hoover said.
Mitsubishi originally set up its U.S. headquarters in Los Angeles, but outgrew those offices in 1983 and moved to rented facilities in Fountain Valley, becoming the first of several Asian auto makers to locate in Orange County.
Mitsubishi moved last year to Cypress, where it built a seven-floor headquarters on part of a 22-acre complex it bought six years ago.
So far this year, Mitsubishi sales are up more than 20%, after a 6% increase in 1988, when 70,075 cars were sold. This year, the company expects to sell 130,000 cars.
“They’ve simply been trying to be in the race. The best thing that could happen with the Galant is to say it’s equal with the (Honda) Accord. That’s what’s happening. And people are saying the Eclipse and Mirage are superb,” Peterson said.
Every day, car shoppers drop into Costa Mesa Mitsubishi for their first visit ever to a Mitsubishi lot, according to Joe Coons, general manager of the dealership, which opened in late 1982. “They say, ‘Boy, I’ve never even been in a Mitsubishi.’ . . . We’ve been on this street longer than most dealers around. And only now do people realize we’re here.”
Rettie at J. D. Powers said Mitsubishi’s recent attention is “rather like a woman becoming Miss America. She was no different without the title. But suddenly people are saying she’s the best.”
ASIAN AUTO MAKERS’ U.S. SALES
Includes cars, trucks and vans built in Japan and the United States.
Manufacturer 1988 U.S. sales Volume Toyota 926,569 Nissan 691,362 Honda 625,373 Mazda 348,615 Hyundai 264,282 Subaru 155,956 Acura 128,238 Isuzu 114,925 Mitsubishi 113,591 Suzuki 57,851 Daihatsu 11,460
Source: J. D. Power & Associates