USA - Mitsubishi sees sales grow, and profits return in the USA

Mitsubishi Motors Corp., amid a remarkable sales rebound this year in the United States, is targeting its first profit in North America since the global financial crisis.

Now CEO Osamu Masuko pledges to build on the company's momentum with a badly needed injection of fresh product, starting with two possible new entries as early as next year.

The nameplates include the long-delayed Outlander PHEV plug-in hybrid crossover and a sedan version of the Mirage subcompact hatchback. After that, Mitsubishi plans to step up its electrification push with plug-in hybrid versions of the next-generation Outlander Sport and possibly the Montero SUV, Masuko told Automotive News.

Mitsubishi's beleaguered North American business is finally recovering from years of slumping sales and operating losses. In October, it increased its North American sales target to 116,000 vehicles for the current fiscal year, which ends March 31, 2015. That is up from an initial target of 109,000, and a 20 percent increase over the approximately 97,000 sold last fiscal year.

The company also forecasts a North American operating profit of ¥3 billion ($26 million) for the current fiscal year. Albeit meager, that result would be Mitsubishi's first North American operating profit since the fiscal year ended March 31, 2007. It also contrasts with the operating loss the automaker is predicting for this year in its home market of Japan.

"One of the important efforts inside the company has been turning North America from red ink to black," Masuko said. "Finally we can realize that."

He credited better-than-expected sales of the Outlander Sport compact crossover and Mirage hatchback, imported from Thailand, for helping dig Mitsubishi out of its North American hole.

Through October, U.S. sales have surged 30 percent to 64,564 vehicles, well ahead of the industrywide 6 percent gain. Sales of the Outlander Sport, Mitsubishi's best-selling nameplate, were up 25 percent to 25,620 vehicles, while the No. 2-selling Mirage notched volume of 14,240, against the 495 units sold when it was trickling into the U.S. last year.

"It's performing beyond expectations," Masuko said of the pint-sized Mirage. "There was a hike in volume, and it helped revitalize the dealers. It is contributing to our profit."

Small-car success

The success of the three-cylinder Mirage has emboldened Mitsubishi to consider following with its Thailand-built sedan version, sold as the Attrage and Mirage G4 overseas, Masuko said.

That sedan version could arrive in the second half of the next fiscal year, he said, meaning sometime between October 2015 and March 2016.

"It's not the case that we can't introduce small cars to the U.S. market. If the fuel economy is good, it will be accepted," Masuko said. The Mirage hatchback gets an EPA-rated combined 40 mpg.

"There is the possibility for small vehicles," he said. "That is why we are considering an introduction of the small sedan."

Mitsubishi will also bring the Outlander PHEV in that time frame. The launch of that crossover, already on sale in Europe and Japan, was delayed by a battery production bottleneck.

Battery capacity should increase to 60,000 units next year, up from 50,000 this year and 30,000 last, Masuko said. But battery supply could get tight again in the fiscal year ending March 31, 2017, when Mitsubishi introduces a plug-in hybrid version of the next-generation Outlander Sport, he said.

Mitsubishi plans to bring a plug-in and gasoline version of that vehicle to the U.S. A diesel drivetrain is also planned, but it is unclear what markets will get it.

Montero returns?

Rounding out the product push will likely be the full-size Montero SUV, sold as the Pajero in most overseas markets. Mitsubishi phased out the Montero from its U.S. lineup in 2008.

Mitsubishi previewed the next-generation Montero with its GC-PHEV concept shown at the 2013 Tokyo auto show. Mitsubishi plans to launch gasoline and plug-in versions of the next Montero sometime after April 1, 2016.

"We are putting our emphasis on SUVs in the United States," Masuko said. "So we have to think about introducing the next-generation Pajero to the United States. There's going to be a PHEV version. And we would like to introduce it."

Still up in the air: Mitsubishi's plans for a large sedan.

Mitsubishi and Renault SA have been in talks since November about Renault's supplying a midsize sedan to fill the hole in Mitsubishi's lineup left by the phased-out Galant.

Masuko says Mitsubishi is still weighing its options.

But one thing is certain, he added: Mitsubishi has no plans to follow Suzuki Motor Corp. in pulling out of the U.S.

"We are trying to introduce new vehicles," he said. "We aren't thinking of withdrawing whatsoever."

Hans Greimel

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