Things aren't going well for Mitsubishi right now, and its dealers are suffering, too. Things are so bad, some are ready to give up on the brand. A memo from dealers sent to the company's North American CEO last week demanded "swift action" to keep the "dealer body engaged in selling new vehicles."
The memo, obtained and reported on by Automotive News, says dealers are focusing on selling used vehicles instead of trying to sell new ones. Mark Chaffin, Mitsubishi's North American CEO, told the publication the company wants to do everything to support dealers, adding that improving dealer profitability was his priority.
In the last quarter of 2024, the company tried to help by offering trade-in assistance rebates, lowering sales targets, and increasing bonus payments, which Chaffin said resulted in dealerships selling more cars.
But more help needs to arrive fast.
AN spoke with a few Mitsubishi dealers who paint a grim picture. One told the outlet he's losing $80,000 a month at one store and hasn't made any money for 18 months. Another, who sold his stores last year, was losing $300-$400 on every new car sold. Four out of the 15 dealers closed in one Midwest region in about a year.
Another dealer told AN each of their stores lost $1 million last year, blaming rising prices and a dated lineup for the profit slump, despite sales in the country increasing by 38 percent year-over-year. Mitsubishi sold nearly 110,000 vehicles in America, most of which were the Outlander and Outlander PHEV, totaling 49,182 units. The Outlander Sport is the brand's second best-selling vehicle at 15,015, far below its sibling.
The Outlander PHEV is the brand's newest vehicle in America, but it sits among an otherwise dated portfolio. The Outlander is already a few years old, and dealers likely need an injection of new product to interest consumers again.
The call for action from dealers arrives just weeks after the automaker decreased its net profit forecast by a whopping 76 percent due to increasing costs, high marketing expenses, and poor sales. The company also adjusted its sales target down to 848,000 units globally, which is still more than it sold the previous year.
But high sales don't eliminate the financial challenges that Mitsubishi, Nissan, and other automakers are facing today. It's only a matter of time before we see how this all shakes out.
Source: Automotive News
