Mitsubishi Zeros In on US Market

Company picks up market share, coming out from under shadow of its sales through Chrysler

TO many people, the name Mitsubishi evokes a sleek World War II fighter plane. In these times of peaceful coexistence, however, the giant Japanese corporation has a very different target in mind. Mitsubishi is zeroing in on the United States new-car market. And at a time when virtually every nameplate is slumping from recession, Mitsubishi is expecting to post its eighth consecutive year of record growth in the US.

Not bad for a company that was virtually invisible until 1983.

The first Mitsubishi automobile reached this country 20 years ago. But for more than a decade, Mitsubishi was an unknown importer, its product sold only as "captive imports" carrying Chrysler badges, such as the Plymouth Arrow or Dodge Colt.

While the relationship with Chrysler continues, Mitsubishi began crawling out from under the shadows in 1983, when it established its own, independent sales subsidiary, Mitsubishi Motor Sales of America (MMSA).

First-year sales totaled just 42,072 cars and trucks, fewer Mitsubishi-made products than Chrysler. Last year, that independent sales total jumped to 190,730. What has happened?

Mitsubishi has, according to one industry analyst, been a "textbook example" of how to grow a franchise.

For years, its product line was limited to inexpensive, small, and fuel-efficient vehicles. Today, Mitsubishi offers a nearly full line of cars and light trucks, from the subcompact Galant to the new Diamante luxury car.

To catch the consumer's eye, it emphasizes "affordable, usable technology," says executive vice president Richard Recchia.

MMSA's 3000GT sports car is a technological showpiece, boasting four-wheel-drive, all-wheel-steering, even aerodynamic surfaces that change their shape depending on the speed of the vehicle. The 3000GT was recently named Motor Trend magazine's "Import Car of the Year."

That wouldn't mean much without more product to sell. And supply has long been limited by Japan's so-called Voluntary Restraint Agreement. Making matters worse, MMSA had to divide its quota with its US affiliate, Chrysler. But "Chrysler isn't taking its share anymore," notes Garrett Nash, MMSA's director of marketing. So MMSA has been only too glad to increase its share of the quota allocations.

Chrysler has played another critical role in Mitsubishi's US growth strategy. The two companies jointly own and operate the Diamond-Star Motors assembly plant in Bloomington, Ill.

They also jointly developed the plant's prime product. That sporty coupe is sold by MMSA dealers as the Mitsubishi Eclipse. Chrysler sells it as both the Dodge Laser and Eagle Talon.

WITH more of the import quotas and added volume from Diamond-Star, MMSA has been rapidly expanding its dealer network, from a few score outlets along the West and southern coasts to 501 dealers today in every major and most secondary markets.

Sales have been rising fast. And despite the recession - and a 7 percent sales slump during the first four months of the year - MMSA still predicts it will end the year on an up-note, with a total of 213,000 sales.

Mr. Nash insists that number is only a modest one, compared with MMSA's long-term goal. "We'll look to see ourselves ... maybe overtake Mazda in the next five years," he says.

Mazda sold a total of 349,677 cars and trucks in the US last year.

Optimistic projections are routine but often meaningless in the auto industry, however auto analyst William Pochiluk of Autofacts Inc., believes that in the case of MMSA "it's realistic."

First, he says, the company will have to add more product, and find a way to get it into the US. The import quotas aren't likely to be lifted anytime soon, most trade experts say. So another course for Mitsubishi would be to get a bigger stake of the Diamond-Star Motors plant's production.

That is under active discussion, and a deal may be announced at any time, numerous sources suggest. Cash-short Chrysler supposedly wants parent company Mitsubishi Motors to increase its stake in Diamond-Star to as much as 80 percent.

"Up until last year, we were the second channel, and Chrysler was first," says Nash. "Now that's flip-flopped."

In the process, Nash says, MMSA not only gets more attention from Mitsubishi planners and designers back home, but also more money, product - and respect.