New chief says 380 sales on target

Despite having only sold a total of 2601 380s since its launch six weeks ago, Mitsubishi's new president and CEO Rob McEniry says sales of the company's make or break car are "so far so good" and within planning parameters.

According to the latest official VFacts sales figures, Mitsubishi sold 1650 380s in the month of November and 951 in October.

After the release of the October sales figures the company said in a statement: "The strategic decision to hold back pricing details until mid-October has largely been responsible for only 951 cars being delivered, but dealers are holding a very strong order bank that is continuing to grow daily. Consequently, Mitsubishi is expecting a strong November 380 result as sales flow through."

It might be debatable as to whether 1650 sales of an all-new car in a segment that has just four major players and last month recorded a total of 13,450 sales could be regarded as "strong", but McEniry says that there has been a good response to the car from media and showroom traffic has been positive. However, he says, the company is up against some very tough competition with heavy discounts being offered on all of 380s rivals and this is not a direction Mitsubishi wants to take.

"Our top market priority for 380 is to preserve the lifecycle values so we will not be reducing the recommended retail price of that car nor will we be dumping large quantities of cars into rental or other fleets just to achieve sales targets," he says.

"Both these actions destroy residuals and damage the value proposition in the longer term for our customers.

"I don't mean that we will not be responsive to competitive actions but our marketing activities will be structured to protect lifecycle values for our customers.

"In the short term our sales will be impacted by this discounting as our competitors try to offload their excessive inventories."

McEniry says that there is also a slower ramp up of sales for an all new model or nameplate - rather than a generational replacement - but the company expects to hit its running rate of 2500 per month by March next year.

If achieved, this would give Mitsubishi an annual 380 volume of 30,000 a year at which point he says the manufacturing operation is still a viable proposition. Mitsubishi's plant in Adelaide has the capacity to do about 40,000 cars a year on one shift and McEniry says the company is looking at both a second model line or selling the extra capacity to another manufacturer.

The last time Mitsubishi sold more than 30,000 locally built cars was back in 1998 when it offered both four cylinder and V6 Magnas and the up-spec Verada.

Elsewhere in the market, Mitsubishi is certainly regaining some ground with its two best performers in terms of growth being the small Outlander SUV and the light commercial Triton ute and cab chassis. To the end of November Outlander sales are up 1358 units to a total of 4282 while Triton 4x2 and 4x4 sales have increased by 3232 units to 9393.

McEniry says while the overall market is expected to decrease next year - forecasting a total new vehicle sales of 975,000 - Mitsubishi should be able to raise its market share with new products due in the second half of the year in the form of a Colt convertible, all-new Triton and new Pajero.

These together with other unnamed products that would "fill a couple of holes" should all help Mitsubishi get back in the black, says McEniry.

"If we can build up the rest of the product portfolio over the coming years that all contributes too because it increases the volume a little bit and you start getting a broader customer base," he said.