The rehabilitation of Mitsubishi

Ask Mitsubishi Australia CEO John Signoriello about the new-car market and he'll tell you straight out that it's currently a challenging business environment.

"It's not easy out there; the market is down," Signoriello told carsales during the launch of the upgraded Mitsubishi Outlander PHEV (pictured), earlier this month.

"I think we've gone through a period where we've been fortunate this year. With the Triton refresh and ASX and some model-year changes with Outlander I think we've taken advantage of that."

New or revised product always generates more showroom traffic, but Signoriello says that the company and its dealer network have increased market share by 0.5 per cent this year through other tactics, running out superseded models among them. Stock management is a problem however, as Signoriello admits.

"I think we're getting on top of it. It's not just our stock, we've got to consider the network stock, and it's going to help them [the dealers] bring their stock under control.

"When you make decisions to pull volume back, the ships keep coming... and it normally takes three or four months to react. It takes some time."

On the subject of shipping, Signoriello says that the company has been affected by stink bug infestations, but not as badly as some brands.

"A lot of us probably share the same carriers, [but] it hasn't affected us in a big way – cars out of Thailand, which is Triton, Mirage and Pajero Sport – but we haven't been impacted in a big way. I can't say that's a reason for anything for our volume."

Sales may be down in 2019, but Mitsubishi's share of the declining market has improved – at some cost to other brands. Asked whether the current economic downturn and consequent slump in the new-car market was foreseen by Mitsubishi, Signoriello laughs.

"We weren't planning to see a downturn as we're seeing now. If anyone did, please let me know... We'll hire them."

The Mitsubishi boss doesn't accept that the current economic climate can be pinned down to any one particular factor.

"I actually think it's a perfect storm. It's a combination of a number of factors... if you actually look at the key economic indicators – inflation's down, employment is reasonably strong – it actually says the economy is probably doing okay, but then there's some underlying factors...

"Consumer sentiment is down, and we're seeing business sentiment being down as well, so headline?

"'Looks good, what's the problem?'

"But there are other factors that obviously come into play that are impacting as well. The key is it's affecting everybody, as in all the manufacturers. It's just a matter of how we manage our way through it, because it will correct itself in time. The question is when?"

There are some parallels with the last dire economic period in Australia's recent history. In 2008, Mitsubishi closed down its manufacturing plant at Tonsley Park in South Australia no more than six months before the Lehman Brothers collapse, which triggered the Global Financial Crisis.

"I've been at Mitsubishi for 30 odd years, so I was part of that closure, and worked down in manufacturing for 20 years of that 30 years. It's really sad to see manufacturing end in Australia, generally, let alone just Mitsubishi.

"How have we progressed after that? We made some strategic decisions – SUV [and] LCV [light commercial vehicles] – was the main focus.

"As an organisation we restructured obviously; you go from a large employee base to: you're a sales organisation. Your cost base is different. That cost base means that what you're importing and the revenue you're generating in imports and your costs to manage [that]... you can control that a lot easier than you can in a manufacturing environment. I think we're doing okay."

For Signoriello the cascading collapse of local industry players five years later revived unpleasant memories.

"When I heard of the other brands closing their plants it brings back the memories and you feel for those that are actually needing to reinvent themselves [as] a different organisation, [in] a different industry.

"It's always about the people; look after the people, that's the most important thing, because they're your greatest advocates, but you genuinely want to look after the people; it's as simple as that."

Since 2008, the old Mitsubishi facility at Tonsley Park has been transformed.

"It's got a university, it's got a TAFE, there's industry there – different industries. It's a pretty bubbly and alive sort of place."

So there is life after manufacturing – for the brand and the employees.

Mitsubishi went through the mill in the years immediately prior to the plant closure at Tonsley Park. Hardly a week went by without mainstream media speculating – correctly, as it turned out – that the company would end local production and move to full-line importation. President of Mitsubishi Australia at the time, Rob McEniry, was unequivocal concerning the part the media played in killing the prospect of continued production at Tonsley Park.

McEniry's successor in the role, Osamu Masuko, was quite candid 18 months later, when he warned that the remaining three manufacturers might find the going hard in years to come, and it was fortunate for Mitsubishi and its production-line workers that the plant had closed down just ahead of the global financial crisis.

In 2009, reflecting the local market's disquiet in the aftermath of the GFC and the loss of sales volume from the locally-built 380, Mitsubishi's sales slipped backwards, but that situation was turned around the following year after the arrival of the strong-selling small SUV, the ASX. It helped too that Australia had made it through the GFC without entering recession and consumer sentiment rebounded quickly.

As new product reached consumers (and the Lancer small car continued to sell well), sales steadily improved. Barring a few speed humps along the way, Mitsubishi has consistently built its sales from just over 60,000 vehicles in 2008 to nearly 85,000 last year. For the year 2019 so far the company has sold over 76,000, with one month of sales remaining.