Mitsubishi Motors To Merge Its Japan's Sales Channels

October 4, 2002

TOKYO -Dow Jones reported that Mitsubishi Motors Corp.will merge its Japan sales channels and reduce the number of its domestic outlets, the company said Friday.

Through the moves, the struggling Japanese carmaker aims to bring its domestic passenger car sales operations back into profit.

Mitsubishi Motors, in which DaimlerChrysler AG has a 37.3% stake, will merge its "Galan" and "Car Plaza" dealer networks in January into the " Mitsubishi Motors Network," the company said.

Mitsubishi Motors decided to merge the two sales channels now "because it didn't make sense to have more than one channel for the number of our outlets and because we will now seriously move forward to reform our domestic distribution network," Eiji Iwakuni, the company's vice president in charge of domestic sales, told a news conference.

Earlier Friday, Iwakuni met with Mitsubishi Motors' dealers and presented to them a set of goals they need to clear in order to maintain business contracts with the carmaker after March 2004.

About 70%-80% of the 227 dealers that operate a total of 1,050 Mitsubishi Motors outlets are unprofitable, Iwakuni said.

Depending on the consumer approval of the Colt compact scheduled for launch in Japan next month and a minivan in May, all these dealers may become profitable, he said.

Even so, Iwakuni said he expects the newly set criteria to help reduce the number of dealers to around 150.

On the other hand, he hoped the number of outlets wouldn't change much, contradicting his statement in August that the number should be reduced to 600- 900 in order to better meet the company's sales volume.

On domestic sales, Mitsubishi Motors' near-term goal is to win orders for 15, 000 units of the Colt between its mid-November launch and end-December. Between the launch and end-March, the company further targets orders for 50,000 units, Iwakuni said.

For the minivan model to be launched in mid-May, Mitsubishi Motors aims to receive orders for 7,000 units a month at the start, he said.