For the last six months, scandal-tainted Mitsubishi Motors Corp. has been trapped: It has felt compelled to refrain from sales promotions despite its desperate need to boost plunging sales.
Now that the automaker has declared an end to its defect coverup woes, however, it is set to launch an aggressive marketing drive in September, MMC Chairman Yoichiro Okazaki said Friday.
“We plan to first launch image advertisements to appeal to the public that MMC has totally changed,” Okazaki said in an interview. The firm will then advertise a new model that debuts this fall, he said.
On Thursday, the automaker released the final results of an in-house investigation into past vehicle defect coverups, thereby declaring an end to the problems.
MMC said a further 224 cases of individual repair concealed by the company had been unearthed, although none was linked to any accidents.
MMC had carried out a three-month probe of all available safety-related documents dating to January 1979.
“We can now at least say there are no more past defect coverups (still unrevealed),” Okazaki said.
Okazaki, 61, stated that MMC aims to drive domestic sales back above 60 percent of the previous year’s levels on a monthly basis, beginning in October. To this end, he hopes introducing the new Colt Plus compact will boost sales.
The new model “will decide our fate for the current fiscal year (ending next March),” said Okazaki, who was invited from group company Mitsubishi Heavy Industries Ltd. in April to help revive MMC.
Following revelations earlier this year of defect coverups involving MMC and Mitsubishi Fuso Truck & Bus Corp., a truck unit spun off from MMC in January 2003, customers have eschewed the firm, with domestic sales plunging about 50 percent in June and July.
In light of public sentiment, MMC has voluntarily refrained from posting sales advertisements since March.
Dealership employees have mostly been engaged in activities aimed at restoring consumer trust by carrying out free auto checkups, instead of promoting sales.
Expectations for the Colt Plus — the first new model to be launched in 1 1/2 years — are mounting among MMC employees as well as its dealerships nationwide.
But analysts are skeptical over the new model’s potential to boost sales.
“The new car will be only a remodeled version of the Colt compact. I doubt the remodeled Colt can compete against other automakers’ new models,” said Yasuhiro Matsumoto, a credit analyst at BNP Paribas Securities (Japan) Ltd.
Okazaki said that, while MMC’s domestic sales only account for about 20 percent of total sales, he believes boosting the domestic presence is crucial for a Japanese carmaker to survive.
MMC was forced to revise a revival plan announced in late May within a month due to a greater-than-expected slide in domestic sales.
In the new turnaround plan, the automaker revised downward its domestic sales target for the current fiscal year to 220,000 from the originally announced figure of about 300,000. To cover falling domestic sales, the new plan features greater cost-reduction efforts, including salary cuts and no winter bonuses for domestic employees.
Okazaki said domestic sales in August are expected to be about 60 percent of the previous year — a gradual improvement from the past two months. He hopes this means consumer confidence is returning.
“What we have done over the past few months is clean up the past wrongdoings and bring it to the public to vanish doubts smoldering among consumers, dealerships and even our employees,” Okazaki said.
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