Curtis Hutchinson: Mitsubishi goes for growth
For most car makers 2018 was a tough year. Not so for Mitsubishi whose sales, powered by strong business demand, saw it grow faster than just about any brand in the UK as it kicked off an ambitious five-year plan.
When the SMMT published its registration figures for 2018, showing the market down 6.8%, there was more red than black on the table with most manufacturers recording year-on-year losses.
One of the few brands to post an increase, let alone a double-digit increase, was Mitsubishi who closed the year up 31.5% with 21,156 new car registrations, its highest total since 2015.
The brand benefited from sales increases across its fleet and retail channels on the back of high demand for the new Eclipse Cross and Shogun Sport and the significantly updated Outlander PHEV.
For Rob Lindley, who joined the brand as managing director in April 2018, this was vindication of his five-year plan aimed at achieving sustainable growth of 50,000 cars and commercials by 2023.
Lindley had previous headed Harley Davidson’s operations in Europe, Middle East and Africa, and was sales and marketing manager of McLaren Automotive; although it is his experience as managing director of the fledgling Mazda brand which resonates most with his current position.
“There’s similarities between where Mitsubishi is now and where Mazda was back in 2002, not long after we took over distribution [from the importer]. At Mazda we grew the business from 14,000 to 50,000 units in six years and there’s a lot I learnt in that time in terms of growing a brand and engaging with the dealer network,” he says.
Lindley moved quickly to engage with Mitsubishi’s retailers, as seen by the brand’s elevated showing in the most recent Dealer Attitude Survey published by the National Franchised Dealers Association where it was the most improved car maker in the survey, rising from a lowly 21 (out of 30), to becoming the ninth most valued brand as voted by dealers; above the likes of BMW, Honda, Audi and Volvo.
Happy dealers tend to be profitable ones with a regular supply of new models to shout about and this was reflected in the results as Mitsubishi’s growth has been on the back of increased business, especially in its fleet channels which are slightly ahead of retail.
Last year saw Mitsubishi’s total fleet volumes across cars and commercials rise 30% to 12,953 units. Within that business sales increased 80% with the brand starting to realise the untapped potential it has in the SME arena, facilitated by dealers working closely with local businesses and greatly helped by its new and updated SUV models.
The car maker has plans to further grow its SME offerings this year with a formalised local business strategy which will be introduced after April.
“We want to encourage dealers to become more active in their local markets as we think there are further opportunities for us to grow in the SME space. Our dealers are very good at selling to local businesses they have relationships with, also our product range lends itself well to local businesses,” says Lindley.
“There is growth potential, but we have to make sure that what we’re targeting is incremental to what we would have sold anyway.”
A challenge facing Mitsubishi this year is to continue selling a high volume of Outlander PHEVs, the UK biggest-selling plug-in, following the Government’s nonsensical decision to end the plug-in grant for PHEVs last October, claiming the subsidy had achieved its aim.
“We were disappointed with the decision and thought it was premature of the Government to remove the incentive at a time when this market is really still starting to get going,” he says.
However, so far, business has not been adversely affected. The brand saw a spike in PHEV orders prior to the grant’s removal followed by a dip. Fleet orders have since settled at around 90% of where they were before.
“For company car drivers there’s still compelling reasons to run a PHEV, including the Benefit-in-Kind saving, and the demand is still high. While the cost of acquisition has gone up for the operators there is still demand from those wanting to go green.”
Lindley’s ambition for 2019 is to achieve further year-on-year sales growth, especially in fleet, although forecasts are problematic because of the uncertainty caused by Brexit. Mitsubishi, of course, is in a potentially vulnerable position as all its models are imported, either from Japan or Thailand.
“The biggest challenge for us will be if there’s a disorderly Brexit which would have an adverse impact on exchange rates and our cost of sales which would either have to be reflected in our margins or passed on in pricing to customers.
“We’ve got off to a grand start as part of our five-year vision, there might be market uncertainty but we have a lot going for us with a fresh line-up and major facelifts coming this year for the L200 and ASX. 2019 will be about sustaining positive momentum.”