Mitsubishi Motors is part of Mitsubishi Corp., Japan's largest trading company, which includes marine transport, aircraft manufacturing, ship building, nuclear power, waste treatment, satellites, defence contracting, glass, petrochemicals, oil products, beer, property and casualty insurance, warehousing and more.
Mitsubishi Motors, the car-making company, had a terrible year in 2004. Sales in Japan and the United States, its two key markets, plummeted 30 per cent and the company posted a loss of $4.7-billion (U.S.). The auto maker has struggled with a scandal over covering up safety recalls that went back to 2000.
However, the parent company threw the car unit a $2.6-billion lifeline and installed a new president in January. The company has cut 6,500 jobs, sales are improving in the United States and the new president in Japan says the unit will be profitable next year.
Paul Cummings became president of Mitsubishi Motor Sales of Canada this summer.
Vaughan: Paul, have you taken leave of your senses? When I last saw you, you were president of Volvo Canada. Now you've switched to become president of Mitsubishi Canada. Volvo is a profitable company, part of the Ford empire. Mitsubishi lost more than $4-billion last year. There must have been some nasty office politics at Volvo to make you jump.
Cummings: Tsk, tsk, Michael, I'm shocked that a journalist of your stature would forget one of the sacred commandments of your profession. Never assume anything. Your assertion that there must have been something rotten in Sweden for me to leave Volvo simply isn't true.
Working as president and CEO of Volvo Canada from January, 2001, and adding Mexico in 2003, I gained international experience across North America and I've learned what consumers want in terms of performance, value, quality and safety.
Those are the same characteristics that Mitsubishi builds into all of its cars and trucks. That, plus the fact that Mitsubishi Canada is in good financial condition, is committed to the Canadian market and has what I see as great potential in the Canadian marketplace is what made me move.
Looking only at total sales can be misleading. You must look at the type of sales to get a clearer picture and the most recent numbers.
Mitsubishi Canada is currently focusing on retail sales, reducing its emphasis on less-profitable fleet sales. Retail sales in Canada are up 8.6 per cent year-to-date. Granted, fleet sales are off by about 70 per cent, but overall sales are down just 13.5 per cent, largely because of our focus on more retail sales.
Vaughan: It's been brutal for your 50 dealers in Canada and now Mitsubishi Motors Corp. president Osamu Masuko is calling on them to invest their money to improve their stores. How can they when none are profitable?
Cummings: It's hardly stop-the-presses news that car companies are constantly encouraging dealers to upgrade their facilities and most Canadian Mitsubishi dealers are eager to do so when finances allow.
I believe Mitsubishi dealers see the tremendous potential of Mitsubishi. They see that the brand is well received; new models like the 2006 Eclipse are selling very well and we have the best-backed cars in the business.
With all of this going for us, I think there is plenty of room for us to extend our brand and grow market share. Remember, Mitsubishi entered the Canadian market just three years ago with 18 dealers. Now we have more than 50. Based on those growth patterns and the momentum we've gathered over the past year, I think it's highly likely that we'll grow to 90 dealers in the next two to three years.
Vaughan: You have the new Mitsubishi Raider pickup truck, which is just a tarted-up Dodge Dakota. You have the new hatchback, which is just a tarted-up Dodge Caliber. How does that help your dealers?
Cummings: Mitsubishi has long been the supplier of compact and mid-size Dodge pickups and compact entry-level Chrysler vehicles. In fact, Mitsubishi was one of the developers of the mid-size pickup. Its success has spawned a flood of competitors.
In fact, our dealers tell us they can't wait to get the "tarted-up" Raider and Evo [Evolution]. The Raider pickup truck is scheduled for Canada for the fall of 2006. The plan for Canada is to introduce the Evo in the 2008 model year.
The Evo is doing extremely well in other markets and we are working hard to meet Canadian specifications so that we might enjoy similar market success here.
Vaughan: The redesigned Eclipse has been recalled twice. That's not helping Mitsu's quality problems.
Cummings: Both recalls were for minor quality concerns involving the supplier of Eclipse's brakes, the first involving only a couple of dozen cars. Neither voluntary recall represented a serious safety concern and the supplier problem has since been resolved.
Vaughan: All right, enough with the negatives. You must have seen something about Mitsubishi's potential to do what you did. What was it?
Cummings: I see challenge and opportunity at Mitsubishi Canada. The greatest challenge and opportunity is to help to continue to build the Mitsubishi brand.
Our momentum from the past year, which was driven by significant sales growth, is the result of exciting, quality products, an unparalleled warranty and innovative advertising.
I'll take that combo any day. Anyone who hasn't taken leave of their senses would, too.
Michael Vaughan is co-host with Jeremy Cato of Car/Business, which appears Tuesdays at 8:30 p.m. on Report on Business Television and Saturdays at 2 p.m. on CTV.
