January 20, 2011
Mitsubishi to Discontinue Eclipse and Galant
By LAWRENCE ULRICH
Mitsubishi has announced it will discontinue select models for the North American market.
Above, a 2009 Eclipse. Mitsubishi has announced it will discontinue select models for the North American market. Above, a 2009 Eclipse.
Looking to jump-start its stalled American car sales and meet environmental targets around the world, Mitsubishi is placing a big bet on electricity. Under a global plan announced Thursday, the company plans to offer six new plug-in hybrid and battery-electric models by 2015.
Mitsubishi’s American unit will also drop three slow-selling models by 2013: the Galant midsize sedan, the Eclipse sporty coupe and the Endeavor sport utility vehicle. In their place, Mitsubishi will offer some of the smaller hybrid and electric models, which will also be aimed at developing markets.
The Japanese automaker will sell its first electric car in America, the Mitsubishi i, this November, starting in Hawaii, California and other Western states. That four-seat city car — known as the i-MiEV in other markets — will offer a roughly 70-mile range for under $30,000, not counting tax incentives that can chop thousands off the price.
Moe Durand, a Mitsubishi spokesman, said the drastic lineup shift would let the company focus its resources entirely on compact, or smaller, models. He said the Eclipse, Galant and Endeavor, which are built at Mitsubishi’s plant in Normal, Ill., were too large to be exported successfully to foreign markets, including China.
Combining small-footprint cars with electrification is a natural strategy, Mr. Durand said. He added that clean-diesel technology — especially expensive exhaust-treatment systems — was too expensive to install profitably on smaller, more affordable cars. “It seems the only way to meet regulatory targets in several markets is to aggressively leverage battery technology,” he said.
The Mitsubishi brand arrived in the United States in 1982 — though Chrysler had previously rebadged Mitsubishi cars and trucks as Dodges and Plymouths and within two decades grew into a serious competitor. From 5,200 cars in its initial year, the company peaked in 2002 with 345,000 sales, or 2 percent of the market, according to J.D. Power & Associates.
Then came a free fall: sales and market share fell by half within two years. J.D. Power analysts noted that after the company marketed aggressively to young buyers, loan default rates shot up and sales dropped as credit standards tightened.
Once-solid models like the Eclipse coupe fell behind the competition, and the company’s burly S.U.V.’s fell out of fashion. Last year, Mitsubishi sold fewer than 56,000 vehicles, less than 0.5 percent of the market.
Meanwhile, the Normal plant has limped along. Although it has the capacity to build nearly a quarter-million cars a year, it has recently turned out just 30,000 to 40,000.
Yet while the plant will lose its current products, its workers will be spared for now. At least one of Mitsubishi’s compact models — the Lancer sedan and hatchback and the Outlander and Outlander Sport crossovers — will be built in Illinois. Mitsubishi will announce its choice in February; the Outlander Sport appears to a leading candidate because of its potential international appeal.
Driving enthusiasts can also breathe easily: the Evolution, a powerful all-wheel-drive rally-style car that has a huge cult following, will remain part of the Lancer lineup.
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