If you’re an automotive reporter or enthusiast, your gut is telling you that Mitsubishi is doomed and nearly every sign seems to confirm this. The reality is that Mitsubishi is too successful in the United States to kill. Let me repeat: Mitsubishi is too successful to kill.
The Mitsubishi death watch has started and, while it’s entirely possible that Mitsubishi will cease operations in the United States in the future, I think it’s premature to argue that it’s more likely that it’ll happen because of the shuttering of their plant in Normal, Illinois. Quite the opposite.
Despite popular belief, Mitsubishi is actually expanding in terms of sales in the United States, with car sales up about 32 percent year-over-year in June and up nearly 25 percent for the first half of the year.
Their total sales peg them at around 8,000 cars a month, which is better than brands like Mini and Fiat. They’re hardly too small or contracting (though it’s true their dealer network appears to be.) If you’re not doubting the existence of Fiat in the United States then think twice about why you’re so worried about Mitsubishi.
Their products are all sort of mediocre, but almost pleasingly so. The Mitsubishi Outlander Sport is cheap but it isn’t terrible and it fills a need in the lower end of the CUV market that Hyundai-Kia have abandoned by building better, more expensive cars. Some laugh at the Mirage, but that feeling you get that you’re seeing them everywhere isn’t just a feeling. You are seeing them everywhere.
Mirage sales are up 63.3 percent year-over-year, with 13,501 vehicles through June. That’s more than sales of the Volkswagen Beetle convertible and coupe combined, which is sort of poetic when you consider that the new Mirage is more like an old Volkswagen Beetle — basic transportation that doesn’t make you hate yourself — than the newer Beetles ever were.
The only Mitsubishi model that isn’t expanding is the iMiev, but that makes sense because who would buy an iMiev who isn’t part of some elaborate prank?
Mitsubishi is a Japanese company that sells a lot of cars in a lot of places, so being able to offload 100,000 cars in the United States isn’t a bad little sideline if it doesn’t cost too much. Ford sells about as many cars in places like Venezuela and, for now, it makes sense.
The catch in that sentence is the “doesn’t cost too much” line. At one point Mitsubishi was selling three times as many cars and, in that era, it made sense to build cars in the United States. The yen was also high relative to the dollar and American production was cheap. Now it’s the opposite, the yen is down and the dollar is up.
Keeping the plant in Normal, Illinois makes less than no sense for the brand. It was formed as a joint venture with Chrysler in the ‘80s only to see Chrysler abandon the plant in 1991, leaving them with the facility and with a UAW contract. Production isn’t so high that demand can’t be met other places and, with a UAW contract to be renegotiated in August, it only made sense to do it now.
There is no way that the Normal plant was particularly profitable or logical, although it’s clearly unfortunate for the people there who will lose their jobs if another manufacturer can’t be found.
Mitsubishi has a chance to do what other companies have done and re-establish their brand with new products and imports. If they want to build a plant, it makes more sense to build in a place like Mexico where the free trade agreements are far superior (the Normal plant, for instance, used to export vehicles to Russia).
If anything, this speaks more to the realities of globalized production than anything to do with Mitsubishi.
Would shuttering the Normal plant be the first sign that Mitsubishi is abandoning the United States? Yes. It’s also the first sign that Mitsubishi may be trying to adjust its United States operations more sustainable so they can stay here for a long time.
I’d bet on the latter.
[CORRECTION: In the original story I wrote “Mirage sales are up 63.3 percent year-over-year, with 13,501 vehicles in June,” when what I meant was “through” June. This has been fixed.]
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