Mitsubishi tests new small car in U.S.

[Variance]

Mitsubishi tests new small car in U.S.

Kathy Jackson | | Automotive News / April 3, 2006 - 6:00 am

LOS ANGELES - Mitsubishi, eager to expand its U.S. lineup, is testing a small car in California.

Two i cars arrived in March and will be driven in the Los Angeles area. The i car is sold in Japan.

"We will drive it to get customers' comments," says Hiroshi Harunari, the new boss of Mitsubishi Motors North America Inc. "We will study things like which size engine is suitable for the U.S."

Harunari, a 33-year Mitsubishi veteran, was chosen by the parent company to bring new products, leadership and consistency to the U.S. unit.

Yet Harunari, 57, the fourth CEO of the U.S. division in three years, has never lived in the United States. He takes over at a time when sales are slipping and Mitsubishi's marketing voice is weak.

He is a close confidant of Osamu Masuko, president of Mitsubishi Motors Corp.

Says Masuko: "This (changing CEOs) is not good for either the dealers or the customers. We need consistency here and in Japan. That's why Harunari will be here for a long time. Mr. Harunari will not be back for a while."

His predecessor, Rich Gilligan, now has the title of co-CEO and is still working at the company. Masuko and Harunari, who took the U.S. job in December, were interviewed at Mitsubishi's headquarters here.

Harunari did not say when or if the i car would come to this country, but he says it has possibilities. It has a major shortcoming for U.S. drivers: a tiny 660cc turbocharged engine. It sells in Japan for $11,142 and gets about 40 mpg.

"I think this would be a good niche for us to get into," says Ted Terp, chairman of the Mitsubishi National Dealer Advisory Board.

It would join a growing budget-car segment that includes the Chevrolet Aveo, three Scion nameplates, and the Honda Fit and Nissan Versa, which both go on sale this spring.

In the first two months of this year, Mitsubishi's U.S. sales fell 21.8 percent to 15,445 compared with the same period of 2004. Dealers are clamoring for better incentives and advertising.

Harunari, who has been with Mitsubishi since 1973, knows sales and marketing. He worked with Mitsubishi Motor Sales of Europe for about 15 years, spent several years in the strategy department in Tokyo and was named head of overseas operations, including the United States, in April 2005.

Terp says he asked Harunari, "Why did you come to this mess?

"He said everything in his 30-plus years at Mitsubishi had been a challenge, and if he can right the ship in North America he will be looked at as a hero."

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