Mitsubishi Motors Corp. said Tuesday it will start paring its group dealerships to five from 29 on July 1 to help streamline sales channels and turn around its money-losing operations at home.

The five group dealerships will control 293 outlets, compared with 295 at the end of March. Each will be based in one of five areas — Hokkaido, northeast Japan, and east, west and central Japan.

As a result, the total number of dealerships selling MMC vehicles will drop to 129 from 153, leaving a total of 800 outlets across the nation, the company said.

The move is part of a domestic reorganization announced in MMC’s revitalization plan in January 2005.

“We aim to build a structure that will allow us to generate profit even if the sales volume in the domestic market remains 250,000 vehicles,” Fujio Cho, managing director in charge of domestic operations, said at a news conference in Tokyo.

In addition, MMC said it will refurbish 91 outlets in the next year and open large outlets to serve as its flagship stores.

MMC is still reeling from the effects of an embarrassing series of defect coverups that surfaced in 2004. Although domestic sales have recovered, the automaker reported a 43.8 billion yen operating loss from its domestic operations in business year 2006.

It aims to reduce the loss to 20 billion yen in the 2007 business year ending next March.

MMC sold 247,000 cars in Japan in the 2006 business year and hopes to raise that to 250,000 units this year. Even so, the figure is lower than the 278,000 units initially targeted under the turnaround plan.

Cho said MMC intends to focus on the high-margin market.

“We will take quality over quantity,” he said.

About 70 percent of MMC’s domestic sales come from low-margin minivehicles, so MMC plans to push up sales of larger cars to 40 percent of its total in 2007 instead of 30 percent.

MMC unveiled a two-wheel-drive version of the Delica D:5 sport utility vehicle Tuesday that is one of the three models it is depending on to rev up sales of cars with engines larger than 660cc.

The fully remodeled four-wheel-drive Delica D:5, released in January, is selling briskly, MMC said. In the two-month period through the end of March, sales of the four-wheel-drive Delica totaled 9,150, more than double the company’s expectations.

MMC said it hopes the two-wheel-drive version, which is priced between 2.2 million yen and 3.38 million yen, broadens its customer base.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.