Fleet News

Face to face: Lance Bradley, Mitsubishi

IN the high-pressure world of fleet sales, the team at Mitsubishi seems unfeasibly relaxed considering the competition for business it has to face.

Sales managers are hardly lying on sun-loungers waiting for the next Euro 2004 match, but they don't seem to show the strain of keeping up the pace of last year, when the firm achieved its highest-ever sales and racked up the largest growth of any manufacturer, apart from Kia and Mazda.

Yet the relaxed approach seems to be working, as sales for the first quarter of this year have hit record levels again and it is now forecasting sales of 40,000 units by the end of this year, compared to just over 30,000 in 2003 and double the volume of four years ago.

Behind this growth is a string of new model launches, including the new Outlander crossover SUV, the Grandis MPV, the all-new Colt supermini and further developments of the Evo range.

For sales and marketing director Lance Bradley, the calm approach to the relative sales mountain he has to climb reflects a determination to ensure service comes before volume when dealing with fleet customers.

He said: 'I don't have the pressure that some manufacturers have. We sell to people who need our cars, so firstly they want to know what the vehicles can do.

'A key focus is to have excellent cars, but also to have excellent service. We plan our volumes a year before and if we have success that is great.

'But there is no point saying we will do a certain number of units and rigidly sticking to it, because if you really want to achieve that figure you can, but that can impact on residual values.

'It is not a laissez-faire attitude, but ensuring we make money. If you push sales too hard, service can suffer and that doesn't benefit anyone.'

Although size can be important in this market, what really matters is how you perform once the car leaves the forecourt, as the Fleet News Fair Dealer campaign has highlighted.

Having low prices is one thing, but if drivers constantly complain of poor service from dealers, or a fleet manager can't get parts or a response to queries from the supplier, then even the lowest price will count for nothing. It is a view that Bradley wholeheartedly agrees with, as relatively simple initiatives on behalf of customers have been rewarded with contracts that have repaid the effort many times over.

He said: 'Some of our customers have specialist needs for service. They are the sort of people who will pay extra if they know they are going to be looked after.

'That pays off, because our customers talk to others about Mitsubishi being good.

'One customer had a fuse blow on a lightbar fitted to a Shogun's roof. They needed more powerful fuses, so our team went out to all the vehicles the fleet had in the field and replaced all the fuses, rather than just the one vehicle affected. Compare that to its other fleet supplier. When a gearbox broke within a few hundred miles, they were told to take the vehicle to a dealer.

'With more business being awarded, you know who they will choose.'

Its commitment to service is winning customers among fleets which demand reliability and high levels of support because their vehicles are business critical, including the Highways Agency and the Environment Agency.

On average, fleet sales are about 10% of total Mitsubishi sales, but that has increased to about 14% so far this year.

During 2003, with annual sales of 32,250, daily rental volume was kept at 800 units and will be kept under control this year.

Key areas for overall sales growth will be Shogun, which is expected to rise from about 5,000 to more than 8,000 units. In the first quarter of this year, a £2,000 price reduction on Shogun Sport led to a 300% jump in sales to about 1,500 units.

Evo sales are forecast to take off thanks to a wider model range, from just over 800 in 2003 to more than 1,800 this year.

New models are the key to the firm's growth to 40,000 units, with the new Colt expected to take 15,000 sales, the Grandis 2,000 sales and the Outlander 3,000. But the L200 pick-up remains its biggest seller, with sales predicted to reach 20,000 units over the next year.

This is despite predictions that changes to the taxation of commercial vehicles would impact on sales of double-cabs.

Instead of a standard £500 tax charge for all commercial vehicles, drivers will be taxed on a charge of £3,000 if they use vehicles for private mileage. Experts predicted this would kill off sales of double-cabs, which offer a car alternative but are classed as commercial vehicles.

Since the year 2000, sales of the L200 have grown from 2,000 to 12,500 last year. The firm predicted that without the uncertainty of the Government's tax changes, it could have sold more.

Uncertainty over alternative fuels (and what the industry sees as mixed messages from the Government) has also affected the company.

At Sunday Times Motor Show Live in Birmingham, a number of fleet car manufacturers launched a scathing attack on the Government for its inconsistent and confusing approach to alternative fuels (Fleet NewsNet June 4, 2004).

At Mitsubishi, 45% of retail sales of its new Outlander were LPG in March, when the car first became readily available. It also offers a range of other vehicles equipped to run on alternative fuels.

But despite this, Bradley remains relaxed, viewing the challenge the firm faces over the next year as something that can be tackled.

He said: 'We are not trying to be a mass market manufacturer. In a couple of years time, our volume will be 60,000 although that is not an objective. We look at how many models we can sell at a profit for us and the dealer.'

Record sales year marks dramatic turnaround for Japanese manufacturer

MITSUBISHI'S record sales year marks the latest stage in a dramatic turnaround in fortunes for the company over the past few years. In 2,000, when the current management team took over the business, annual sales were 18,000 units – of which daily rental was 6,000 units – parts sales were £38 million and 60% of its 100 dealers were loss-making.

By the end of 2003, sales had hit 32,250, daily rental was 800 units, parts sales had reached £75 million and 95% of its 150 dealers were profitable.

And despite setbacks in its alliance with DaimlerChrysler, Jim Tyrrell, managing director of Mitsubishi Motors in the UK, said the business did not expect any adverse affect in the UK.

DaimlerChrysler announced recently it had no further interest in Mitsubishi, prompting the three companies behind Mitsubishi Motors Corporation to draw up a medium-term business plan and appoint a new chief executive.

Tyrrell said: 'All our current product programmes will continue and we will launch 10 new products in the next three years. We are very confident of maintaining our sales growth.

'For this year, we are launching four new models, backed by existing models that are doing very well and a profitable and motivated dealer network.'

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