by Grant Yoxon
Come October, Canadians will be treated to one of the most remarkable advertising campaigns ever created by a car company. Featuring music by Dirty Vegas (Days Go By), Barenaked Ladies (One Week) and Wiseguys (Start the Commotion), the ads will let you know that a hip new car company has opened for business in Canada.
Mitsubishi has finally arrived. Earlier this Month, the company began selling cars in Canada through 18 Mitsubishi dealerships nationwide. That number is expected to grow to more than 40 dealerships by the end of October, 47 by the end of 2002, and 150 by 2005.
When they ran in the US, the television ads were widely credited with creating top forty hits for bands that were largely unknown. The Wiseguys had already split up and the Barenaked Ladies, despite success in Canada, were going nowhere south of the border.
The ads resurrected the fortunes of the Barenaked Ladies and at the same time rejuvenated a moribund car company that was fast going broke. They redefined the image of Mitsubishi. Once viewed as a manufacturer of old fashioned but affordable cars, the ads struck a cord with youthful buyers, who flocked to dealerships to get into the cool cars pictured in the ads. Brand awareness grew from 44% to 60% and sales shot up an incredible 70% in three years, despite a model line-up that has remained, for the most part, somewhat dull and old fashioned.
In the US, where the Mitsubishi Eclipse is the sports coupe in which to be seen, over 40% of buyers are under the age of 35. The average age of the Mitsubishi customer is 39, fully ten years less than the average age of buyers industry wide.
The success of Mitsubishi in North America, and its return to profitability, is largely the work of Canadian-born CEO Pierre Gagnon and a youthful team of managers including fellow-Canadian Greg O’Neill, executive vice president and COO of the Marketing and Sales division of Mitsubishi Motors North America. The Canadian operation is also headed by a Canadian, Randy Sears. All three started their careers with General Motors.
Credit should also go to Mitsubishi’s advertising agency, Los Angles-based Deutsch Inc. Deutsch, which recently opened offices in Toronto and Montreal, is also responsible for the Canadian campaign.
Gagnon told auto journalists attending the Canadian press introduction of the Mitsubishi models in Montebello last week that the time was right to move into Canada. “We’ve never had a better model line-up,” he said.
But the Mitsubishi models seemed strangely out of step with the Gen Y image projected in the advertising (see Greg’s overview of the 2003 Mitsubishis). The ads ask, “Are you in?”, but one is more inclined to ask “Where’s the beef?”
There is no doubt Gagnon and his team know how to market cars, but whether or not they know how to design and build cars remains to be seen.
Mitsubishi’s plans call for the introduction of seven new models over the next three years including the Outlander, the Lancer Evolution and a new mid-sized SUV, the Endeavour.
This latter vehicle is the first to be designed and built in North America for the North American market. It marks a change in Mitsubishi’s product strategy, from adapting a Japanese platform for North American use to designing a platform from the ground up specifically for North America.
Superior marketing is bound to bring Mitsubishi initial success in Canada. Their sales targets of 5000 vehicles in 2002, 20,000 in the first year of operation and 38,000 per year by 2005 are reasonable and attainable. Canadian president Randy Sears said that, privately, they talk of selling 80,000 units a year.
But it will take more than marketing to reach this goal. To sustain its momentum, and to seriously challenge the Japanese-Canadian automotive establishment – Toyota, Honda, Nissan and Mazda – Mitsubishi will need competitively priced innovative products that compare favourably with the competition.