Mitsubishi is a storied brand that has made some of the most legendary cars in the world, but in a “what have you done for me lately” auto business that ebbs and flows more dramatically than an episode of Grey’s Anatomy, the brand is facing some challenges. Growth certainly isn’t one of them: Mitsubishi entered this year as the fastest-growing Asian auto brand after seeing a record sales year in 2018.
Sustaining that growth will be the issue, and how the company approaches this topic will impact how able it is to continue seeing record years. Its sister company, Nissan, recently announced that it will cut up to 10% of its lineup and thousands of jobs over the next three years to shore up the books, and while no such announcement has been made at Mitsubishi, it’s the perfect time to do some soul searching at the Diamond Star brand.
Here are some of the challenges facing Mitsubishi and what they can do to address them in the coming months and years.
Despite his recent, um … troubles, former chairman Carlos Ghosn was actually quite good at reviving flailing car companies. He did it at Renault, then Nissan, and had his sights set on Mitsubishi — but “Le Cost Killer” wasn’t looking to just hack chunks out of the balance sheet and move on. One of Ghosn’s leadership philosophies was to show absolute commitment to the rebuilding process and in return, he got the same level of commitment from everyone at the companies he helmed.
Unfortunately for Mitsubishi, Ghosn had only just begun to settle into his turnaround plan when he was scuttled by a myriad of legal and financial troubles. His vision for the Diamond Star brand included accelerating growth by drawing technology and resources from the alliance with Nissan and Renault. The release of innovative models such as the Outlander PHEV with show how far a company can progress in a short time, but with Ghosn’s fall who will crack the whip?
It’s true that both Nissan and Renault are left without the same visionary leadership, but Ghosn had already stepped down as CEO at Nissan, and both companies until recently enjoyed the benefits that several years of painful turnaround efforts have yielded. Mitsubishi is in a much more precarious position. Whether the Alliance itself remains in place without the Ghosn glue is anyone’s guess, but the more immediate problem for Mitsubishi is leadership and culture. The next person that sits in the top chair will be faced with all the same challenges, but few have shown a willingness to do what Ghosn did and be brutal where it counts.
Subjectively, Mitsubishi makes good-looking vehicles. The problem is that, like watching even the best episode of Ghost Hunter, they go most of the way to delivering an actual ghost (being great all-around vehicles) without giving us everything we want. Despite sharing at least some of its corporate structure with Nissan/Infiniti, whose engineers have been busy at work developing all sorts of powertrain trickery, Mitsubishi has stuck with combinations that come close to really delivering the goods but fall just short of greatness. The Eclipse Cross, for example, has enough “oomph” to be entertaining but is plagued by a continuously variable transmission that sucks the joy out of the experience. One could argue that sourcing a powertrain from Nissan would yield the same results, since the brand has used almost nothing else for years, but over a decade under the influence of the evil CVT has created something that is way more than tolerable in daily use.
There’s plenty to like with the Mitsubishi’s interior designs, as they’re mostly comfortable, modern affairs. The problems arise when the quality and construction of the material don’t always match up with the price tags of the vehicles. Somebody at Mitsubishi must have gotten an awesome deal on glossy black plastic, because it’s easily the most abundant interior material across the product line.
Also troubling is the sense of sameness between vehicles, where the designs are so similar, and parts are shared so pervasively that the difference between a nearly $40,000 Outlander PHEV and a $25,000 Outlander Sport doesn’t feel $15K big. It’s true that buttons and switches don’t make the driving experience, but it’d be nice to know that at least some of the extra cost was spent on the little bits as well.
Anybody looking for a case study on how to rebuild a brand need not look any further than Kia and Hyundai. For many years, the Korean automotive housemates struggled in Western markets with poor quality and boring designs, and consumer confidence in the brands understandably took a hit as a result. Even a 10-year, 100,000-mile warranty couldn’t right the ship fast enough. It took a dedication to quality and many years of screaming it from the rooftops to reframe the companies as more than just budget brands. Not overnight, but over a decade later, both are solidly rated high on the reliability and quality lists. Their vehicles are still good values but cost more now as a result of their turnaround.
The problem isn’t with the warranty — Mitsubishi already has that. It’s in the product line. Save for the innovative Outlander PHEV, there isn’t much in the Diamond Star stable that can’t be found in another automaker’s lineup. There’s also not enough price incentive to purchase a Mitsubishi over a competing vehicle. Why would a buyer in the market for a subcompact crossover purchase an Outlander Sport, when for the same money (or less) there are more compelling choices like the Subaru Crosstrek or the Hyundai Kona? Either cross over (no pun intended) to a quality-first ethos and scream it as loud as possible or embrace the budget-brand crown and run with it. The middle ground occupied by several of its vehicles now sets Mitsubishi right in the crosshairs of cars and crossovers from all over the map — in a place where nobody wants to compete.
Mitsubishi certainly has some interesting models in its global catalog, though I’m sure nobody’s arguing for the Delica to make its way here (though they should … just look at it). There is an argument to be made for a legit SUV like the Montero or Montero Sport (yup, they still make it) to make a return. There’s even a hint of a rumor of a murmur that the Lancer Evolution may make its return, with a Renault/Nissan platform no less, but even that wouldn’t be enough. More anonymous crossovers aren’t the answer either. There has to be a focus on differentiating models with compelling tech and a focus on quality if Mitsubishi expects to make headway in the market. A smaller product line may be the answer, but the brand certainly has a big enough stable to draw innovations from.
I’m personally cheering for the brand. Besides the fact that I like that I can buy an air conditioner, a pencil, and a car all made by the same company, more choice in the auto market is a good thing for everyone. It’s why we should be excited to see Peugeot make a return to the U.S. market and for upstarts like Rivian to make their dent in the EV landscape. Despite the always-harsh, always-changing market’s unforgiving nature, Mitsubishi can stay relevant — compelling even — but it won’t happen fast. I’ll be rooting for them, and you should too.
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