One of the most famous car companies in the world was on the brink of death in the US a few years ago. But now its CEO is fighting to bring it back to its former glory.
- Fred Diaz took over as president and CEO of Mitsubishi Motor North America in April.
- Diaz, a former executive with Nissan and RAM Trucks, will be tasked with returning Mitsubishi to prominence in the US.
- Mitsubishi has experienced sales growth over the past five years but is still trying to recover a disastrous period at the end of the last decade.
- Diaz believes the Mitsubishi's membership in the Nissan-Renault-Mitsubishi Alliance will do wonders for the brand.
On his first day as Mitsubishi Motors North America's CEO in April, Fred Diaz held a town hall with is employees. The message was simple.
"I needed them to know that I'm not a Nissan employee who is on loan," Diaz told us in an interview. "I'm 100% Mitsubishi."
"We're family now," he added.
In October of 2016, Nissan acquired 34% controlling interest in MMNA's parent company, Mitsubishi Motors, valued at $2.3 billion. This move created the Renault-Nissan-Mitsubishi Alliance.
As part of the Nissan's takeover, opportunities were created that allowed executives to crossover to Mitsubishi.
One of the people to make the shift over was Fred Diaz, who is now tasked with leading Mitsubishi back to prominence in the US.
Diaz has a long track record of success in his 30-year career in the car business. Prior to becoming the president and CEO of Mitsubishi Motors North America, the straight-talking executive helped Fiat Chrysler launch its massively profitable RAM truck division and more recently as the head of Nissan's revamped truck division.
Even though his background is in the sales and marketing of all facets of the auto industry, "people still know me as the truck guy," Diaz said.
How the once great Mitsubishi fell from grace
Mitsubishi is a car company with a storied past. The Japanese automaker has famously given the world such iconic vehicles as the rugged Pajero/Montero/Shogun SUV, the high-tech 3000GT sports car, and the all-conquering Lancer Evolution rally car.
In 2002, the company offered eight different models to US consumers with annual sales peaking at more than 345,000 cars that year.
But by 2009, Mitsubishi's lineup had contracted to just five models with sales dwindling down to less than 54,000 cars.
The financial crisis pushed the brand to the brink of exiting the US market like Suzuki and Isuzu a decade earlier.
Globally, the company stagnated, stopped growing, and ran short on resources to develop new products, Nissan, Renault, and Mitsubishi Motors chairman Carlos Ghosn told us in a 2017 interview.
The company was forced to hit the reset button and decided to hitch its future fortunes to crossover SUVs - more specifically, the Outlander and its many derivatives. It's a decision that has proven to be absolutely brilliant.
Since 2009, the company's sales have nearly doubled.
"When the opportunity came, due to some unfortunate circumstances concerning Mitsubishi Motors, to have them inside the alliance, we were convinced it could be a good fit. This was not something that came out of the blue." Ghosn said.
But even after half a decade of consistent sales growth, the 103,686 cars Mitsubishi sold in 2017 is but a mere fraction of its peak in 2002 and represents a minuscule 0.6% share of total US auto sales.
"We're still a tiny, tiny brand compared to the gorillas in the automotive industry, but we have to start somewhere and we have to grow to return to our heyday," Diaz said.
Which means, in spite of healthy sales growth, Mitsubishi in the US remains a major reclamation project.
'We're just an unaware brand'
Externally, the biggest challenge for Diaz will be brand awareness.
"We have a huge awareness problem in the United States," he said. "Some people didn't even realize Mitsubishi still sold cars here."
Fortunately, this is a fixable problem.
"We're not a damaged brand. We haven't done anything that caused us a black eye or do something that made everyone in America want to hate us," Diaz explained. "We're just an unaware brand."
Afterall, The Renault-Nissan-Mitsubishi Alliance is currently the largest car company in the world with 10.61 million cars sold worldwide in 2017.
For the first time in 11 years, there are Mitsubishi car commercials running on US network TV. The company is also making huge investments in social media, regional advertising, and the generation of electronic sales leads.
Diaz is making big changes internally
Mitsubishi had an unfortunate history of "saving their way into a profit," Diaz told us. As a result, necessary investments in planning and operations weren't made. There were holes on the management team that had to be filled.
The new CEO traveled across the country to all of the company's offices and met individually with employees not only to introduce himself but also to assess the talent on his bench. And when he could, he promoted from within.
There were also issues with the brand's dealership network. There weren't enough of them and the ones they did have, have not received sufficient support from Mitsubishi to truly succeed.
According to Diaz, Mitsubishi had only two regional offices to support its entire network. In fact, one of the regions was tasked with assisting dealers in a whopping 38 states. To improve the situation, Diaz has expanded the number of regions to four with a possible further expansion to five.
"We have 360 dealers across the nation and we have open points across the country that we need to fill," he said. "We just need to put dealers in places where consumers can feel confident that they won't have to drive 100 miles to get their vehicles maintained."
Unfortunately, adding new dealerships was much easier said than done.
"Two years ago, trying to get a dealer to invest in a Mitsubishi franchise was really difficult," Diaz added. "The pickings were slim."
Fast forwards 18 months and things have greatly improved with the backing of The Alliance.
"We're now turning people away," he added.