Mitsubishi will stop shipments to Europe of key models including the Outlander plug-in hybrid SUV as early as September, a move that will badly hurt the automaker’s dealers in the region, a source told Automotive News Europe.
Mitsubishi announced last month it would wind down operations in Europe but didn’t give a time frame, saying only that it was “freezing the introduction of new products.”
Along with the Outlander, the company will stop shipping the ASX small SUV and Eclipse Cross compact SUV to Europe next month, said the source, who has close ties to the company, on the condition of anonymity.
Imports of the Space Star/Mirage small car, the brand’s best-seller in Europe, and L200 pickup are expected to continue until the end of 2021, the source said.
"Without the SUVs there is no business," the source added. "Dealers can’t survive on the small car and L200."
Mitsubishi Europe has not responded to request for comment.
Halting imports of the key models saves Mitsubishi from having to re-engineer them to comply with new emissions regulations, the source said.
The three SUVs accounted for 64 percent of Mitsubishi’s 53,242 passenger car sales in the first six months of this year, figures from JATO Dynamics show.
French Mitsubishi dealers expressed surprise and anger at the automaker's decision to halt new products for Europe, especially with the Outlander plug-in hybrid benefiting from a government subsidy for low-emissions vehicles, the French automotive news site JournalAuto.com reported.
"It's absurd," said David Gaist, director of the GCA dealership group, which is building a new Mitsubishi showroom in the city of Nantes. "We did not think that the brand was going to leave Europe. But staying with two aging products and no future product plan is clearly impossible."
Mitsubishi had planned to begin European sales of a new Outlander later this year using a platform from its alliance with Renault and Nissan.
This year the automaker had also planned to launch a plug-in hybrid version of the Eclipse Cross, a key model for dealers who have struggled to sell the SUV since its 2017 debut because it’s only offered with a thirsty gasoline engine.
Big discounts
Mitsubishi’s sudden withdrawal will make it difficult to sell in-stock models without big discounts.
“Now the customers and dealers are in a difficult situation. We’ll need an additional 20 percent to 25 percent discount to sell the cars,” the source said.
Mitsubishi has said it will retain an aftersales presence in Europe. Mitsubishi not yet discussed compensation for dealers and importers, the source said.
Mitsubishi has sold cars in Europe since 1975, largely through a network of independently owned importers. In 2019, Mitsubishi moved to strengthen its European operations by setting up a new company to oversee regional sales.
However, Mitsubishi said in May that moves to grow in regions such as Europe had pushed up costs, resulting in big losses. The automaker said last month it expected an operating loss of 140 billion yen ($1.33 billion) for the financial year ending March 2021 and laid out plans reduce its workforce and production with the aim of cutting 20 percent of fixed costs in two years.
The cost-cutting includes pulling out of Europe to concentrate on profitable sales in Southeast Asia.
Mitsubishi gave importers in Europe just three days’ warning of the July announcement that it would freeze model launches, the source said.
Upheaval at the company, which has been controlled by Nissan since 2016 following an emissions scandal in Japan, includes the announcement Friday that Chairman Osamu Masuko, one of Japan’s longest-serving automotive chiefs, will retire.
Current CEO Takao Kato will take over as interim chairman, the company said.
Peter Sigal contributed to this report
