Mitsubishi Motors Corp. is struggling to overcome its severe financial and management troubles as its rivals speed ahead.
While the Mitsubishi group has boosted the struggling automaker’s capital by about 500 billion yen, MMC sales remain low despite this being summer-bonus season and thus usually a time of increased demand.
MMC executives have said they intend to recoup the losses by marketing a new car in the fall, but a sense of gloom pervades on the sales floors.
“We will try to turn our ship into one you may wish to visit again,” reads a poster on a wall at an MMC-affiliated showroom in Kobe.
The poster went up after it was revealed in 2000 that the carmaker was hiding consumer complaints of vehicle defects. More coverups followed.
“Frankly speaking, we want to peel the poster off the wall,” said the shop manager, Katsuro Tahara.
During peak times, about 20 customers would visit the shop each day, but since the latest scandal, the number has dropped to two.
“Usually, we are quite busy during the bonus season from June to July,” Tahara said. “This is the first time we’ve been so quiet.”
In July, the shop sold 10 vehicles, half the usual number — and they were sold to people affiliated with the Mitsubishi group or their relatives.
But the repair shop was humming with customers taking advantage of the free inspections the company is offering in a bid to revamp its tarnished image.
“There is no other way than to talk to our customers, and we take every opportunity, such as conducting vehicle inspections,” Tahara said.
The other major Japanese automakers posted good sales figures in the April-June quarter on brisk sales in the North American and Asian markets.
Toyota Motor Co.’s group net profit rose 28.8 percent from the previous year and Honda’s climbed 12.2 percent. Nissan Motor Co. and Mazda Motor Corp. also increased sales.
But MMC saw its sales figures plunge 8.1 percent with a net loss of 54.6 billion yen.
To deal with the severe situation, MMC President Hideyasu Tagaya announced in early August that the company will introduce a new model.
But the vehicle is only a remodeled version of an existing one, and a completely new model will not debut until at least after next year.
The company’s plan is to sell 60 percent of what it sold last year in the October-December quarter and 70 percent in the January-March quarter of next year.
No Mitsubishi vehicles made it onto the top 10 list of best-selling cars in the first half of this year, and its sales during the period plummeted 34.2 percent from the same period last year.
With sluggish sales, the company’s sales networks are disappearing. In April last year, it had 186 sales companies, but that fell to 170 as of last month. The number of dealerships also dropped from 977 to 923.
“Dealers are risking their entire assets and don’t want easy measures to recover sales,” said Koichiro Nishihara, chairman of the Mitsubishi Motors Sales Group Association.
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