Fleet News

Mitsubishi: the price is right for fleet business

WITH lower prices and a new sales strategy, the Japanese manufacturer is cashing in following the introduction of the new benefit-in-kind company car tax system.

Mitsubishi would not be the first vehicle manufacturer to spring to mind as the prinicpal beneficiary of the new company car tax system.

With a number of niche products – including a famous range of off-roaders – and a lack of a diesel in its mainstream vehicles, Mitsubishi has not been well placed to deal with the sudden interest from company car drivers in lower emission vehicles.

However, the company has been a pioneer in the introduction of gasoline direct injection (GDI) technology – something PSA Peugeot-Citroen, Volkswagen Group and Mercedes-Benz have been slower to develop and introduce.

And since Mitsubishi has been under new management, its products have been priced more realistically.

An example would be the Carisma, which could not compete with the offerings from volume manufacturers when in 1999 a range-topping 1.8 hatchback with automatic transmission was priced at £17,475 on-the- road. The same Carisma in 2002 is priced at £13,995.

Mitsubishi was the first manufacturer to cut prices right across its range of cars in the wake of the Supply of New Cars Order 2000.

Further changes have taken place since. Dealers have been given more favourable terms by the manufacturer – as well as the reassurance of selling cars with lower list prices – and there is a single arm dealing with fleet and retail sales.

Lance Bradley joined Mitsubishi last year from Ford, and is now responsible for fleet sales, retail sales and used car sales.

He has recently been joined by Andy Wertheim as national fleet sales manager, and believes Mitsubishi is now in a position to target contract hire and leasing companies, commercial vehicle fleets and blue-light fleets, as well as traditional corporate sales.

Bradley said: 'It is my ambition to have a Shogun police patrol vehicle on every motorway in the UK, but we need to make sure we don't run before we can walk.

'When the current management took over two years ago, the L200 pick-up truck was being murdered by grey imports, the Shogun was over-priced and our dealer network wasn't making any money. Our first move was to make dealers profitable again, because if you don't have a profitable dealer network you don't have a franchise.

'We worked hard with the factory to make the Shogun a competitive price proposition. We also did a lot of work on reducing the impact of grey imports on L200, making supplies available to dealers and working with the factory to get lower prices.

'We are now pleased with the results on retail sales, but we also had to tackle fleet sales and used cars.'

The company announced earlier this year that it would be ending its buy-back rental business and cut its 2002 fleet sales targets by 60%. However, while fleet sales fell short of targets last year, retail sales were booming and dealers have been given incentives to handle fleet sales negotiated by the company.

'A lot of our fleet business has been quite costly,' said Bradley, 'with much of it on buy-back. Residual values suffered and we have now almost completely withdrawn from buy-back.

'We will do business with rental companies but not on buy-back and we have no desperate ambition to sell huge volumes.

'We used to do fleet business to sell high volumes of Carisma, but that is not a strategy I would have pursued. Although the fleet market is very important to us, fleet volume is not so important. We are happy to do fleet business but not as a means to boost registration figures.'

A booming area for Mitsubishi during its period of restructuring and rebuilding has been in the commercial vehicle sector with its L200 pick-up truck. The L200 is currently the market leader in a sector that offers workhorse four-wheel drive vehicles with a payload of 1,000kg, but also a double cab with car-like interior comfort for commercial vehicle drivers who really need a dual purpose vehicle. Bradley says his fleet team are keen to sell the L200 after years of selling large numbers of Carismas.

'We do a lot of fleet business with the L200,' said Bradley. 'We inherited a team that was used to selling Carismas and it took them a while to get used to the other vehicles. We needed to emphasise that we should always be proud of what we sell. The fleet team had almost been apologising for selling Mitsubishis. It was quite a culture change for some of them, but now we have reached the stage where people want to speak to us. We think we have something serious to offer some fleet customers. If someone is looking for 1,000 upper-medium sector cars they are not going to come to us.

'But if they want excellent service for excellent products – we keep that in mind with everything we do.'

Mitsubishi has also recently signed a deal with Renault to use its 1.9-litre common rail diesel engine in the Carisma and revised Space Star – giving its mainstream models added fleet appeal.

Currently available as a 102bhp engine, Mitsubishi is also evaluating a 115bhp version with a view to offering both variants.

And Bradley is optimistic about the next few years – with DaimlerChrysler involved in running the company and all new products in the pipeline. He said: 'There are big changes under way with DaimlerChrysler coming in. Although our products have been good, our strategy hasn't always been focused.

'Over the next five years we will be launching a range of new, highly competitive products. We will have the Airtrek SUV and a new compact car. We are not aiming to compete with the Mondeo and Vectra in the upper medium sector. We want to concentrate on representing what Mitsubishi stands for.

'We have an excellent reputation for four-wheel drive and high-performance vehicles. There must be a Ralliart version of our new small car, with four-wheel drive and active yaw control – a mini Evo.

'We will also introduce a family of Evo VII-sized saloons with less than 200bhp, as well as a platform-share project with the new Mercedes-Benz A-class and four-door MCC Smart.'

As for Mitsubishi's fleet business, the company is still both interested and involved. Bradley is keen to see Shoguns in high-profile roles with blue-light fleets and has recently done business with the police authority for Northern Ireland for Shoguns and Shogun Sports.

'We will probably do reasonable volumes in fleet,' said Bradley, 'But the most important thing is that we don't overstep the mark.

'We are here to provide the right level of service, we need to give people a reason to buy cars from us. It isn't going to be because we are the cheapest, but because we provide the best service.

'We have to be more competitive on price but we must also concentrate on the products and service.'

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