Mitsubishi's North American chief bullish on growth

DEARBORN, Mich. November 13, 2002; John Porretto writing for The AP reported that Mitsubishi Motor Co.'s plans to merge its fragmented North American divisions will be finished at year's end, giving the domestic arm more clout in Tokyo, a top executive said Tuesday.

On Jan. 1, Mitsubishi's North American sales, manufacturing, finance and research and development units will become Mitsubishi Motors North America, said Pierre M. Gagnon, who will oversee the venture as president and chief executive.

The streamlining comes as Mitsubishi makes an aggressive push into Canada, Mexico and Puerto Rico for the first time.

The company expects its North American sales volume to reach 600,000 by 2007, tripling the figure from a decade earlier, Gagnon said in an interview with The Associated Press before speaking to a luncheon with automotive journalists in Detroit.

"In the past, we would have had a different product line for Canada, a different product line for Puerto Rico, probably a different line for Mexico," he said.

"Now, we'll most likely have the same line for all areas. It gives us a bigger voice in Tokyo and more weight in future product development because we're looking at it with bigger numbers."

Mitsubishi, partially owned by DaimlerChrysler AG, announced its consolidation plans in July and named Gagnon as CEO. It is Japan's No. 4 automaker behind Toyota, Honda and Nissan.

The 46-year-old, soft-spoken Canadian joined Mitsubishi in 1997 as president and chief operating officer of the company's U.S. sales and marketing arm. He was lured from General Motors Corp. by Mitsubishi's product but quickly realized the brand had little name recognition in the United States.

With new designs and savvy marketing -- and even a little input from his teenage daughter, Chantal -- Gagnon helped create a cooler, hipper image for Mitsubishi. The effort included television advertisements showing people singing catchy tunes while driving Eclipses and Galants.

"We had to take a different approach," he said. "We had to stop being a 'me-too.' We used to sit in board rooms prior to my arrival and say, 'What're Toyota, Honda and Nissan doing,' and gauge our strategy accordingly."

Mitsubishi sold 191,000 cars in the United States in 1998. This year it expects to reach 350,000. With several new vehicles and Canada, Mexico and Puerto Rico in the mix, the company said North American sales should reach nearly 600,000 by 2007.

Mitsubishi, which has its only U.S. manufacturing plant in Normal, Ill., is scheduled to launch seven new products in North America by 2005, including the Lancer Evolution high-performance compact sedan and Endeavor mid-size SUV next year.

"What I like about the program is it's crisp and clean," said Jim Yelverton, a Mitsubishi dealer in Gulfport, Miss. "We're still selling cars to people who are 40 and 50, but it's a product that attracts the younger person and even the future customer who doesn't have his driver's license yet."

Mike Wall, an analyst with the automotive forecasting firm IRN Inc. in Grand Rapids, said the new vehicles and new sales outlets bode well for Mitsubishi's optimistic sales forecast.

The company began selling cars in Canada in September with 18 dealers and has 42 today. It expects that number to grow by 25 a year for the next four years. Mexican sales begin early next year.

"I think they'll find a welcome market as long as they keep their message out there," Wall said.

But Gagnon acknowledged there are still many challenges, such as maintaining capacity while adding new products. He said the company is studying the capacity issue, which could mean following the lead of its Japanese competitors and building a new manufacturing plant in North America.

There's also the uncertain economy and poor results for the company at home in Japan, where sales have plunged since the automaker admitted two years ago to systematically hiding car defects for more than 20 years.

Mitsubishi Motors Corp. on Tuesday reported better-than-expected earnings for the first half of its fiscal year, boosted in part by solid revenue in North America.

"We're going to have some short-term hiccups. We're going to have some economic downturns," Gagnon said. "But we see a very healthy North America in the midterm and long-term."