Mitsubishi cuts prices

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Mitsubishi cuts prices

By Robert Wilson

April 28, 2006


MITSUBISHI has chopped $6500 from the price of its locally made 380 model in a bid to kick-start sales of the slow-selling car and will offer $2000 compensation to some buyers who paid the original price.
From today, the cheapest version of the Adelaide-built sedan will cost $27,990, plus on-road costs, meaning it now costs at least $5000 less than other Australian-made six-cylinder cars. The new offer is 20 per cent less than the $34,490 price on the 380 advertised yesterday.

The move was announced yesterday by Mitsubishi Motors Australia chief executive Robert McEniry as part of a wholesale repositioning of the Japanese car brand in the face of falling sales and the failure of the 380 to meet its volume targets.

With Mitsubishi sales down by 16 per cent this year, he announced price cuts on all locally built and imported models. "As from today (Mitsubishi) will be known as a marque that delivers the best value-for-money package in every market segment in which it competes," Mr McEniry said.

Production of the 380 would be slowed to 75 cars a day by June, resulting in the possible loss of 30 jobs at the factory in the Adelaide suburb of Tonsley Park.

But sales targets for the car remain modest, with an average of only 1500 sales a month forecast.


The 380 was launched in October with a monthly sales target of 2500, but sales to the end of March totalled only 6500.

The 380 had arrived at a time when the Australian car market was turning against big cars, Mr McEniry said.

"The issue has been the segment, not with any single model," he said.

"We had hoped that we'd see an improvement by March, but market conditions haven't changed so we have to be realistic and base our planning on an annual production of between 15,000 and 20,000." Mr McEniry said the company would offer refunds or free servicing to about 1500 retail buyers who bought the 380 at the old price. In an effort to rid Mitsubishi of its reputation as a discount-driven car company, the lower prices had been partly achieved by reducing dealer margins.

"Reduced margins mean dealers will have less freedom to discount," Mr McEniry said.

The repriced 380 will be known as the Series II and adds new chrome trim to the base model in response to criticism of its bland styling. The volume-selling automatic version of the base model, now called the 380 ES, will sell for $29,990.

A new SX model with brighter colours and sportier styling will sell for $32,990, while the prestige LS variant has been dropped.

The more expensive VRX, LX and GT models also get price cuts and some equipment changes.

Despite producing less than half the volume of any other Australian car factory, Tonsley Park could deliver an acceptable corporate return at 1500 cars a month or 75 day, Mr McEniry said.

"The plan we have is totally supported by Mitsubishi Motors. We wouldn't be doing it if we didn't see a long-term future for the car."

Mr McEniry predicted the company's total sales of imported and local vehicles would grow to more than 60,000 over the next financial year. "Next year is the real report-card year," he said.


http://finance.news.com.au/story/0,1...92-462,00.html