Mitsubishi aims for steady sales in 2014

MITSUBISHI Motors Australia Limited (MMAL) says it is on track to match its 2013 year-end sales total of more than 70,000 units, despite a drop-off in passenger car sales in the first half of 2014.

Last year Mitsubishi recorded growth of 21.5 per cent over its 2012 result for total sales of 71,528 units, but its year-to-date sales to the end of June this year of 32,676 puts the Japanese brand behind by 12.5 per cent compared with the same period last year when it had shifted 37,329 units.

MMAL director of marketing Tony Principe said that the company’s internal targets, which tied in with the Japanese financial year that runs from April to March, were being met, but the big finish it had in 2013 has meant a slower start to 2014.

“When we look at what we targeted last financial year from April 2013 to March 2014, our target was to get 70,000 units which we did. We ended up with 71,500,” he said.

“What that meant was the first quarter of this calendar year, which was the last quarter of our financial year, we had done such a good job for the previous three quarters that we didn’t have to do too much in that last quarter.” Mr Principe said a lift in production following the 2011 Thai floods, and then the Japanese earthquake and tsunami, meant the company had an excess of cars in 2013 that forced MMAL to introduce retail offers to clear the stock.

“We ended up going into 2013 with too many cars so we had some really strong campaigns and cleared them through that early part of 2013. We haven’t had the same pressure this year.” Mr Principe said the drop in sales of Mitsubishi’s passenger car line-up in the April to June quarter was due to a lack of stock, with its Japanese plant temporarily shifting focus from the Lancer to the EK ‘Kei’ car while the Thai plant geared up for Mirage sedan production, impacting stock levels of the Mirage hatch.

“We have less stock of Mirage hatch availability. We have dropped our whole push on the hatches. Last year we were selling 1000 a month and this year we are averaging about 400 to 500,” he said.

“We don’t have the same kind of stock access. We turned off our marketing support because of the volume.” With the arrival of the Mirage sedan this month, Mr Principe said the company was hoping for the model’s sales to rebound, but added that it was difficult to turn a profit in the competitive light-car segment.

“What we are hoping is maybe to get about 300 per month out of the (Mirage) sedan now to get our total towards that 800 a month.

“It’s a hard segment. There is a lot of pressure in terms of value for money. For a little bit extra you can get the next level up. It makes it really hard. It’s very hard to make money in that area.” Japanese rival Nissan Australia announced this week that it was discontinuing its Micra-based Almera sedan following sluggish sales since its launch in August 2012.

Mr Principe said the arrival of the Mirage sedan from $14,490 plus on-road costs would take some pressure away from Lancer pricing, with dealers less likely to push the entry point down with a sub-Lancer sedan on stream.

“There’s been a lot of pressure on Lancer pricing from a dealer perspective because the gap between a Mirage (hatch) and a Lancer is pretty big. It is $12,990, $19,990,” he said.

“This (Mirage sedan) will take some of the pressure off pushing the Lancer down. Those that want to stretch up will stretch up, and those that don’t won’t go down into a Mirage but actually stay at a sedan.

“We are hoping this will take some of the pressure off the Lancer sedan pricing. Hopefully it will stablilise things,” Mr Principe said.

“Obviously dealers need volume. Their natural inclination is if we can’t get it from this, we will discount this. We are trying to give them a more balanced range so they don’t have to do anything too crazy.” MMAL has experienced mixed fortunes in the sales race this year, with the Mirage and Lancer both down by 29.3 and 28.4 per cent respectively to the end of June, while the ASX crossover is up by 38.7 per cent to 4115 sales year-to-date and the rugged Challenger off-roader is also up by 9.5 per cent to 1037 units.

The Triton experienced its best month ever in June with 4124 sales, and while 4x2 sales are up by 20.7 per cent to 2391, 4x4 sales have dipped by 14.7 per cent slide to 9447.

The Outlander compact SUV is also down by 18.2 per cent so far this year to 4340, but Mr Principe said the sales of the recently launched plug-in PHEV variant, which matches a 2.0-litre petrol engine with a pair of battery-fed electric motors, were bettering the company’s targets.

“We have done about 420 so far, about 120 per month (of Outlander PHEV),” he said. “We were expecting about 100 a month.” MMAL is targeting fleet buyers with the Outlander PHEV, which is slowly paying dividends for the brand.

“We have gone into the mainstream area of the SUV market and obviously getting traction, we are finding a lot of corporates are now looking at it.

“Obviously that is another step for us to get into corporates where they are running a big fleet for these sorts of cars,” he said.

“They do the sums and they generally pay a lot less for electricity than the average person, so if they can make it work they can save a lot of money.” Mr Principe said the lack of electric vehicle charging infrastructure or support in Australia, as well as confusion about the technology, had kept some private buyers away, but that Mitsubishi was working on pushing the benefits of the PHEV technology.

“Australia is a very conservative market. If you look at what went before, the i-MiEV, the (Nissan) Leaf, the (Holden) Volt, it’s been pretty tough to get any volume. One of the keys for us is for people to understanding the economic benefits. The technology is very new.

“What the dealers are telling us is that it takes a bit longer to sell one of these because their (the buyer’s) mindset is not there. People have not got their head around that they can drive 50km and it might cost $1. You can go 100km and it might cost $2 versus if you did 100km in a petrol or diesel car, it might cost $10.

“Australians have a bit of a negative attitude towards electricity costs because they seem to be going up. It is going to take a little while. There is a lot of positive feedback.”