Life left in Lancer, says Mitsubishi

MITSUBISHI Motors Australia Limited (MMAL) believes it can maintain and even grow sales of the ageing Lancer small-car range against newer rivals, providing it can keep sharpening the value equation and improve its dire supply situation from Japan.

The statement of intent to restore Lancer sales to a higher position in Australia’s dominant small-car segment comes as MMAL management continues to wait for the next-generation model to emerge, with a production version not expected until 2016 or later.

The current Lancer was introduced in 2007.

As GoAuto has reported, Mitsubishi Motors Corporation has prioritised SUVs, light commercials and hybrid drivetrains with its current future model program, and will outsource the its next-generation C- (small) and D-segment (mid-size) passenger cars – that is, the successors for Lancer and Galant – to Renault-Nissan.

Despite the growth in SUVs and commercial vehicles in key markets, the small-car segment in which the Lancer fights remains crucial in Australia and Europe, and is increasingly important in the US.

“We would all love to have a new Lancer, but at the moment it’s a bit unknown where we’re at with it,” said MMAL sales director Greg Cook.

MMAL marketing executive director Tony Principe added: “We really don’t know ... This car is not just for us, it’s for the US and Europe too. The Lancer is still one of their biggest sellers globally so they need to do a pretty good job and we assume they will.” The current Lancer has been in a sales trough in Australia for some time, falling 25.5 per cent last year to 11,408 units to be a weak spot for Mitsubishi as the triple-diamond brand grew its overall sales volume by 21.5 per cent to 71,528 new registrations.

This was a new high-water mark for MMAL since becoming a full-line importer in 2008 with the demise of the locally built 380 mid-size sedan.

Lancer sales are down a further 12 per cent in 2014, averaging 680 units a month over January-February.

However, the Australian subsidiary believes it can return the car to an average of about 1000 units a month, or even more, based on the value-adding strategy it is taking – and if it can secure more supply.

The company recently pruned back its under-performing hatch range to a single high-spec $22,990 GSR variant with VRX-style body adornments and a bigger 2.4-litre engine. An MY14.5 version of the range rolls out in a few weeks, with sportier styling cues and extra equipment.

The issue with supply dates back last year, when the Japanese plant that produces Lancer was also tasked with producing the booming co-developed Mitsubishi eK and Nissan Dayz ‘kei’ micro-cars for the domestic market.

“(It’s) really tightened up ... we’ve been pushed out,” said Mr Principe.

“There are still more changes for Lancer coming from MMC, there is still volume upside, and we think we can get back to 1000 per month and maybe even more per month.

“If we can get standard, normal ongoing supply and do all those changes, we think we can grow it a bit more.” Mr Principe said any proposal to further refine the Lancer range, such as adding a GSR to its sedan range, depended on the factory.

Growing Lancer sales is also central to MMAL’s plan to capture 73,000 sales this year – more than last year’s record, despite a bad start to the year that sees it down 15.6 per cent after two months of trading – and eventually creep up towards the 100,000 target it plans to reach by 2017.

“We need to be stronger in those areas (passenger cars, particularly the C-segment), so what they do there will have a determining influence on how quickly we can grow,” said Mr Principe.

“We’re happy with ASX, Pajero, Triton, Challenger successor cars (all due between 2014 and 2016) but the reality of our market in Australia is passenger is still pretty substantial ... (and) we obviously need Lancer to grow, too.

“Right now we’ve got actual supply constraints that isn’t helping our current volume base, let alone any future volume base, but until we get access to more of the current Lancer – and we’ve done lots of tweaking with that car, and there’s more we can do – but there’s no point doing that without volume.

“If we get more volume we can be more aggressive ... we need to grow that volume base more, but we need more supply out of MMC too.” In the meantime, Mr Cook said the company was urging dealers to redirect prospective Lancer buyers caught out by reduced stock into the ASX city SUV, a move he credits with that model’s 40.5 per cent growth in January-February.

The same tactic will be used with the forthcoming Mirage sedan, due in the second quarter.

Mr Principe added that the company did not want to see its dealer network slashing Lancer prices in order to meet sales quotas, as has been seen in recent months.

“It’s hard to work out why they’re doing it because the reality is pretty soon they’re not going to have any (stock),” Mr Principe said.

“We keep saying to them, ‘You don't need to do this.’ But I guess there are some dealers used to relying on the Lancer deals.

“What we’ve said to them is, ‘You’ve got to understand the market is changing. Try selling more ASXs and Tritons, try selling more Outlanders.’ But a lot of them are very Lancer-orientated, and say they’ve got to sell more.

“But it’s not coming from us.”