Fleet News

Mitsubishi gives vehicle stock outlook after fleet 'guarantee’

Mitsubishi survey shows plug-in hybrid use

Mitsubishi will have access to enough stock for the L200, Mirage and Shogun Sport to remain on sale in the UK for the next two years, the manufacturer has confirmed.

Meanwhile, the Outlander plug-in hybrid electric vehicle (PHEV) and petrol variant, as well as ASX and Eclipse Cross, should continue to be available for another year.

The Japanese manufacturer unexpectedly announced it was pulling out of both the UK and European markets, with stocks of existing models, including the popular Outlander PHEV and L200 pick-up, continuing to be sold until they no longer meet emissions regulations.

A Mitsubishi spokesman told Fleet News: “Stock-wise we have access to a minimum of around 15,000 new vehicles across the entire range presently, with the option to order more L200 and Mirage stock further down the line, so we have no concerns in terms of vehicle supply for the foreseeable future.”

In terms of emissions regulations, he explained that Mitsubishi would not be re-homologating its existing range to meet any future regulatory changes.

He added: “The current Mitsubishi vehicle range meets all current emissions requirements and will remain on sale while stocks last, which should carry us well into 2021 for most models and through 2022 for the newest models in the range (L200 and Mirage).”

Aftersales support will be provided by existing dealers and the Colt Car Company, which imports Mitsubishi vehicles to the UK.

FLEET GUARANTEE

Both the Mitsubishi Outlander PHEV and L200 have proved popular with fleets, with the Environment Agency and Highways England just two of those impacted by the carmaker’s decision to wind up its UK and European operations.

The Environment Agency has 88 Mitsubishi Outlander PHEVs on fleet and 36 on order, replacing the Outlander diesel version this year.

Dale Eynon, director of Defra Group Fleet Services, explained that the Outlander PHEV (commercial variant), in particular, has been a “vital part of our programme to reduce emissions, while maintaining full operational capability and being cost-effective”.

He said: “We will need to get some urgent and immediate assurances from the Colt Car Company in relation to existing assets in respect of service, maintenance and repair (SMR) and warranty claims to make sure there is no drop in service over the coming years.”

The manufacturer stressed that it had been impossible for it to contact all of its fleet customers simultaneously, when the news broke, but it wanted to talk to all of its clients personally to offer them assurances.

“All our clients will be taken care of for as long as they are running our vehicles, that is a guarantee,” said the Mitsubishi spokesman.

Highways England has some 230 Mitsubishi vehicles on its fleet, with 148 Shogun DI-D LWB Auto 3.2 vehicles used by traffic officers along with 30 Mitsubishi Shogun Sport 4 Auto 2.4 vehicles. It also uses 52 Mitsubishi Outlander PHEVs as asset delivery inspector vehicles. All have been brought outright.

Highways England said it was in talks with Mitsubishi about the vehicles on its fleet to “maintain business as usual. This includes the SMR for our fleet”.

SALES FIGURES

UK registrations from January to the end of July show Mitsubishi had sold 5,637 new vehicles, compared with 10,789 during the same period last year.

The 48% decline in new registrations is similar to reductions reported by other manufacturers impacted by the coronavirus pandemic. Market share fell by just 0.8% over the same period.

The Mitsubishi Outlander PHEV, which has proved popular with company car drivers thanks to low benefit-in-kind (BIK) tax, was updated with new trim levels and a new infotainment system, last year (fleetnews.co.uk, September 17, 2019). Prices started at £35,455 (on-the-road) for the revised plug-in hybrid SUV.

However, Government cuts to the plug-in car grant announced two years ago, meant the Outlander PHEV was no longer eligible.

The plug-in grant was cut by £1,000 and no longer applied to hybrid cars with a range of less than 70 zero-emission miles. The Government said the reduction in funding – from £4,500 to £3,500 – for the cleanest cars, and withdrawing the grant completely for the likes of the Outlander, was a sign of its success.

Its BIK tax savings credentials have maintained its traction in the market, however, with the Outlander outselling every other plug-in hybrid SUV on the market so far in 2020, with 2,662 Outlander PHEVs registered from January to July.

It means one in every four new vehicles sold by the manufacturer so far this year was an Outlander PHEV and a total of 51,667 Mitsubishi Outlander PHEVs have now been registered in the UK.

£1.3 BILLION LOSS

That sales success, however, comes after Mitsubishi reported a £1.3 billion loss in the last quarter, resulting in its decision to focus on faster growing, more profitable markets, with the aim of cutting costs by 20% over the next three years.

“The company is effectively pulling out of Europe to focus on the likes of south Asian markets,” said David Bailey, professor of business economics at the Birmingham Business School and senior fellow at UK in a Changing Europe.

Along with exiting UK and European markets, Mitsubishi will aim to improve its bottom line by cutting R&D spend, undertaking ‘salary reviews’ and shutting one of its plants in Japan by next year.

Its European manufacturing operations at the Nedcar plant in the Netherlands were sold in 2012, with cars, instead, imported to Europe.

Planned new models the EU and UK will miss out include a new Outlander SUV and a new Battery Electric SUV (2021), a plug-in hybrid Outlander and L200 Pick up (2022), and the Xpander MPV and Pajero Sport SUV (2023).

Bailey added: “From a consumer point of view, the pull-out is a great shame as the firm has pioneered plug-in hybrid technology in the UK and Europe.”

Bailey believes that the technology will probably find its way into new Renault-Nissan-Mitsubishi Alliance models from Renault and Nissan.

“While the Alliance plan had anticipated a refocusing by Mitsubishi on south-east Asia, I’m still surprised that Mitsubishi is effectively leaving the UK/EU market completely,” he said.

“I had anticipated Mitsubishi models being assembled off the same platforms as Renault and Nissan models, and produced, for example, at Sunderland, so as to maximise the alliance’s market share in the region.”

However, Bailey doesn’t rule out the brand being resurrected in the UK market in this way at some point.

IMPACT ON RVs

Pricing experts at Cap HPI have played down the potential of Mitsubishi’s decision to exit the UK having a negative impact on residual values (RVs).

Andrew Mee, head of forecast UK at Cap HPI, told Fleet News: “It’s important to remember that Mitsubishi is an established brand with some popular models, notably Outlander and L200, and we expect these to continue to be attractive as used cars.

“While some funder and lender nervousness can be expected around residual values, there have been precedents of brands exiting the UK without values suffering, and these include MG Rover, Saab, Daewoo and Chevrolet.

“In all cases, values subsequently moved in line with market and sector trends and were not adversely affected by the brand’s withdrawal.”

Mee argues that the expected availability of spare parts and the knowledge and experience of service engineers should help used sales and values.

Furthermore, he says it’s even possible that, as there will be a finite number of Mitsubishi cars registered in the UK, as volumes on the road decrease over time, then interest from loyal customers could have a “positive impact on used values”.

Virtual Fleet & Mobility Live 2020: The virtual fleet expo

Video: Fleet News editor-in-chief Stephen Briers and events director Chris Lester introduce the 2020 virtual event and give a preview of what it will look like.

The annual event was due to take place at the NEC, Birmingham on October 6-7 but as a result of the ongoing impact of the Covid-19 pandemic, and after consultation with the visitor advisory board, Fleet News has taken the decision to hold an online event in November instead.

Among the exclusive features at the virtual event will be a special EV & Hybrid Showroom which will bring to life the latest electric models with interactive displays that will enable you to get up close to the UK’s best fleet suppliers.

Visitors and exhibitors will be able to communicate through live chat, participate in live Q&As, ‘visit’ branded booths, and find out about industry-leading technology solutions.

The decision to go virtual was made easier by the fact that around 40% of fleets already have, or expect to shortly have, a company travel ban that would prevent them from attending live events this year, while a similar proportion did not anticipate attending live events until sometime in 2021.

 

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