Mitsubishi, Isuzu seen as candidates for...

[Variance]

Link: http://news.yahoo.com/s/afp/20050828/bs_af...shiisuzuclosure

DETROIT, United States (AFP) - Automakers are locked in a cutthroat battle for market share in the US and some say two brands -- Mitsubishi and Isuzu -- are the leading candidates for closure.

"Right now, they're sort of alone on a peninsula that's getting smaller," said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Michigan.

Through July, Mitsubishi - darling of the hipster set just three years ago - controlled just 0.7 percent of the U.S. light vehicle market, according to Autodata Inc. That's a 32.6 percent reduction from the level it enjoyed after the first seven months of 2004.

And Isuzu, a colorful player in America's favorite segment, SUVs, is almost off the radar. Its 0.1 percent share of the market represents a 51.3 percent decline from last year.

This runs counter to the overall trend for Japan-based automakers. In 2004, their share of the U.S. car market grew to 39 percent - up from 37 percent in 2003, according to Merrill Lynch. Their share of the light truck market also grew two percentage points, to 24 percent.

"The issue going forward in the passenger car market will be working for growth in the luxury segment," Merrill Lynch analyst John Casesa wrote in a recent report.

Neither Mitsubishi nor Isuzu have true luxury offerings in their pipelines. But both are struggling to churn out fresh products against a backdrop of instability.

Mitsubishi is in the midst of a 24-month rollout that will see the introductions of six new or re-engineered vehicles designed to establish the brand as sporty and fun. The racy Eclipse was first to debut in May, and Raider - a compact sport/utility truck - is scheduled to arrive in showrooms next month.

They will be followed by a new Spyder convertible, a redesigned Outlander SUV, a refreshed Evo sports sedan and the successor to Lancer.

This gives Dave Schembri, Mitsubishi's new executive vice president of sales and marketing, reason to hope.

"I wouldn't have come here (from Mercedes Benz) unless I saw the kind of future that has the kind of promise that I think it does," Schembri said.

He admits the company's finances are shaky. Still stinging from a former campaign that saw Mitsubishi pump up sales by financing high-risk customers, it recorded a second-quarter operating loss of 89.8 million dollars in North America.

But that represented an improvement from the 174.5 million dollar loss it recorded in the second quarter of 2004. Marketing cost reductions and lower warranty claims sparked by quality improvements saved the company 56 million dollars.

And when DaimlerChrysler AG balked at pumping more money into Mitsubishi - with which is has several joint ventures - its Japan-based parent, a conglomerate that sells products ranging from electronics to machine tools, rode to the rescue.

"I like to compare our situation more with Nissan or Chrysler, five or six years ago," Schembri said. "(Their recoveries) all began with new product, and new product that was more revolutionary than evolutionary."

Nissan's revival began with the introduction of the widely acclaimed Altima family car. And Chrysler restored its reputation as a design leader with the rollout of its cutting-edge 300 sedan.

Isuzu appears more unstable because its lineup has thinned to two model ranges - midsize SUV and, new-for-2006, compact pickup. This time three years ago, it had three nameplates with more than 5,000 sales each. Through the first seven months of this year, it had just one - the Ascender.

And Isuzu's total light vehicle sales are just over one third of its 2002 levels.

"I suppose they'll just muddle along," Cole said, adding he believes Isuzu could vanish from the light vehicle landscape.

"It's so tough for the high-volume brands, for the marginal brands, it's even more difficult," he said. "The bar keeps being raised by the competitive environment. The real question is, if they can't be really profitable, where are they going to get the money to continue their business?"

Isuzu officials have heard this argument before. And they dismiss it.

"That's a comment that we've heard repeatedly over a number of years," said spokesman Chip Letzgus. "All I can tell you is Isuzu has no intention of leaving the U.S."

This week, it threw the gauntlet down by offering its new i-250 and i-350 pickups with a seven-year/75,000-mile powertrain warranty - the most comprehensive program in the segment.

As for Mitsubishi, Cole warns that the money from its parent company may not be enough.

"Mitsubishi has come up with a bundle -- but at some point, the financial people could say, 'We're just putting good money after bad,'" he said.

[Satty]

Fearless predictions: Isuzu is gone by the end of 2008. Mitsu is gone by 2010.

[sciguy_0504]

I think Isuzu will be gone very shortly. Small dealer base, no advertising budget and below-par products. Mitsubishi, IMO, will slowly build up sales and its reputation. It has with the new Eclipse and it has a number of products in the pipeline. A new Lancer, Evo and Outlander will be coming in a couple of years. Its also been showing a number of good looking concepts.

[MyerShift]

Eh, I would much rather have Toyota and Honda be gone! Mitsubishi really isn't threatening to the Big 3.

[LosAngeles]

I think Mits is here to stay....Isuzu, however? They're done within two years. Mitsubishi has the rep of the boy-racer specials Eclipse and Lancer Evo to protect out here. Isuzu quit doing cars long ago, and the only product they have left looks like what Chevy and GMC offers (why did they kill the Axiom again?), so with lack of autonomy, they don't have a leg to stand on...

[bobo]

Unless these smaller companies have a fiercely loyal base, it's hard for them to survive independently. Isuzu sells a lot of rebadges. It can't be costing much to keep it afloat, but you got to wonder why anybody would buy one unless they're taken by the longer warranty or can manage to get one for significantly less than a Chevy or GMC. As for Mitsubishi, I just don't see the hemorrhaging stopping anytime soon. How long will the parent company continue to bail them out before they give up?

[Flybrian]

An Isuzu would be a great buy once the company bites the dust. Daewooesque clearance prices on dependable GM platforms with GM parts and service availability. Right now, however, its not like anyone realizes they exist without the Rodeo and Trooper. As for Mitsubishi, it would be one thing if the North American arm was performing poorly, but back at home they're not in great shape either.

[balthazar]

Mitsubishi, IMO, will slowly build up sales and its reputation.

Let's see- multiple admissions of lying & defect cover-ups stretching back 25 years.... yeah, give mitsu about 40-50 years and they might be able to start rebuilding their 'reputation'.
Then again- that may not be enough time...

[sciguy_0504]

Mitsubishi, IMO, will slowly build up sales and its reputation.

Let's see- multiple admissions of lying & defect cover-ups stretching back 25 years.... yeah, give mitsu about 40-50 years and they might be able to start rebuilding their 'reputation'.
Then again- that may not be enough time...

[post="6878"]<{POST_SNAPBACK}>[/post]

I did saw slowly. Plus, I'm guessing not too many people in the U.S. have knowledge of the huge scandal/coverup.

[balthazar]

I'm guessing not too many people in the U.S. have knowledge of the huge scandal/coverup.

No thanks to the media and the "journalists".

Well... I guess I had better get busy!