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27
MITSUBISHI MOTORS CORPORATION ANNUAL REPORT 2006
Sales Strategy: Back to Basics
U.S. sales operations are currently returning to basics.
Since fiscal year 2004, MMNA has focused on normaliz-
ing sales by reducing sales incentives to appropriate levels,
lowering the ratio of fleet sales, and promoting proper
inventory management. High fleet sales in particular
damage the brand by undercutting resale values in used
vehicle markets. Efforts to reduce the proportion of fleet
sales have been successful, cutting the ratio from a his-
torical high of 30% in fiscal year 2003 to 18% in fiscal
year 2005.
In addition to maintaining these sales policies,
MMNA is also making visits to local dealerships to dis-
cuss ways of improving sales. In light of these discus-
sions, MMNA strives to further motivate dealerships by
developing appropriate sales support programs based
on the dealerships’ requests.
MMC plans to undertake a dynamic strategic adver-
tising campaign in fiscal year 2006. Building on the
25th anniversary of the entry of Mitsubishi Motors into
the U.S. market, the campaign will emphasize MMC’s
commitment to providing customers with sporty, stylish
cars. Campaign plans call for the use of strategic media
to boost exposure in critical major city markets by up to
65% compared with the past fiscal year.
Addressing the problems associated with previous
financial services programs, in July 2005, MMC estab-
lished a new system for financial services operations in
collaboration with leading U.S. financial institution
Merrill Lynch & Co. The new arrangements promise to
reduce significantly the risks associated with sales-
finance receivables.
Aggressive New Model Introduction Program
The first new model to be introduced in fiscal year 2006
was the
Eclipse Spyder
convertible, which was launched
in April 2006. In November 2006, MMC also plans to
launch in the United States the new
Outlander
, a new
SUV model that has proven popular in Japan. The U.S.
compact SUV market has continued to expand despite
the recent sharp rise in oil prices. The new
Outlander
attracted many positive reviews on its debut at the New
York International Automobile Show in April 2006. In
addition, MMC plans to introduce an all new
Lancer
in
March 2007. The new
Lancer
, which shares a platform
with the new
Outlander
, is a global strategic model that
will be rolled out first in the United States. Supple-
menting the succession of new models, MMC also plans
to introduce a number of special editions of mainstay
models such as
Galant
and
Endeavor
to attract new
customers and boost sales.
Regional Topics—North America
Eclipse Spyder Galant