Mitsubishi

Date: Thursday, May 28, 2009

Contributing editor Steve Banner headed to Cirencester this month to meet up with Lance Bradley, managing director of Mitsubishi Motors UK.

How many L200 pick-ups did you sell in 2008 and how many do you expect to sell this year given the 35 per cent decline in overall pick-up registrations?

We sold almost 6,000 last year and that gave us around 23 per cent of the segment. The pick-up market was fine in the first half, but things got very tough indeed in the second half. It was a sudden decline. Business shut off almost overnight. I’d never seen anything like it before. We were pleased with our sales performance given the circumstances.

 

How about this year?

It’s almost impossible to plan ahead unless somebody can tell us what the economy is going to do and when it’s going to improve. As it happens we’re seeing some signs of recovery, with more customer traffic through dealerships. So our plan now is to sell slightly fewer L200s than we did in 2008 while holding enough stock to sell more should there be the demand. Our stocks are about 25 per cent higher than I would really like, but I don’t view that as a problem. We buy from the factory in sterling incidentally (L200 is built in Thailand – SB) so the pound’s weakness is not proving to be a worry to us at present.


Is it correct that one or two of your rivals have offered their dealers extraordinarily generous deals so that they can slash their pick-up prices and maintain registration levels?

Certain of our competitors have been taking extremely aggressive action. We’ve chosen not to follow suit because of the long-term damage such measures can do. You can end up with pick-up owners seeing vehicles going on sale for half of what they paid for theirs, and they’re not going to be happy about it.


Good news if you’re buying a new pick-up now, but bad news for second-hand values and the relationship the manufacturer concerned has with its existing customers. So has your decision not to go on a price-slashing spree helped keep L200 used prices buoyant?

Our residuals are good. Remember that a lot of our customers acquire their L200s under contract hire agreements and the rate they pay is affected by the vehicle’s projected second-hand value. Because we’ve held our nerve over the past few months our values have remained strong which means we can quote competitive rates. By contrast, some leasing companies have stopped taking orders for pick-ups produced by some of our rivals because of the uncertainty that their policies have created.


Are those massive discounts still available?

The market is now starting to return more to normal and our share is recovering to closer where it was. So I think the policy we’ve pursued has proved to be the right one and we should hopefully be able to carry on getting around a quarter of what is an admittedly smaller cake.


Who buys L200?

Around half the sales are to people involved in agriculture — I’m talking about customers such as vets and agricultural wholesalers as well as farmers — with most of the balance going to people involved in the building industry. I’m including trades people such as plasterers and plumbers as well as builders themselves. While farmers are doing OK, which is good news for L200, the building trade isn’t and may take some time to recover.


Even the double cab version of L200 can be treated as a light commercial by HM Revenue & Customs so far as personal taxation is concerned. This means that an employee who switches out of a company car and into an L200 and gets private use of it may end up paying less income tax. Are company car drivers still making the switch?

I don’t think they ever did to any great extent. The number of passenger cars traded in against pick-ups has always been fairly small, although at one stage we had quite a lot of customers part-exchanging BMWs, Audis and Mercedes. However, we never had fleets of Ford Mondeos being swapped for fleets of L200s. I’m not really surprised, because although L200 is a very good truck, it remains a truck. It’s not supposed to be a car and if you’re used to a Mondeo then with L200 you’re looking at a totally different sort of vehicle. Now there are some people who can cope with that — we sometimes get people coming into our dealerships and trying to decide between a Lancer Evo and an L200 purely on the basis that they want something a bit different and both those vehicles certainly are — but we’re not talking about huge sales volumes.


How big a share does L200 — sold solely as 4x4 — take of your total UK registrations, including cars?

Approximately 25 per cent in 2008. It will be less this year primarily because of the launch of the new Lancer family saloon, but it will remain very significant. L200 is really important to all 120 of our dealers — around one in four of the customers they talk to is a potential pick-up buyer — and that’s one reason why they’re so good at selling it. They understand everything that it can do. In particular they understand the 4x4 system and its capabilities. That matters because most of our customers have to go off-road because of the jobs they do. Dealers also know that they can sell a lot of accessories with an L200. The potential is massively higher than it is with one of our cars. The total value averages out at around £1,500 per vehicle compared with £400 to £500 on a car, but it can be more than £10,000.


Can L200 be fitted with a digital tachograph for the benefit of owners who may wish to pull a heavy trailer?

Yes, and that’s been possible for the past 18 months or so. We have an in-house training department and our dealers have received training on tachographs and the Drivers’ Hours rules.


You’ve been especially effective at promoting high-specification versions of L200 with names such as Warrior, Animal Cab and Raging Bull. What share do they take of total L200 registrations?

Around 75 per cent and they tend to be bought by people who are self-employed or run small businesses; people who are going to drive them themselves in other words and want the luxury of a car combined with the practicality of a truck. Our 4Work and 4Life models mostly go to rental companies and fleet customers who tend to use them purely as commercial vehicles.


Have you launched any new special editions recently?

We introduced the Trojan Double Cab, and at a competitive price. It sits just below Warrior and standard equipment includes 16in alloy wheels, climate control, electric rear windows, a rear diff lock and colour-coded wheelarch extensions. Sales are OK, but it’s hard to tell what’s really working and what isn’t in the current market. We do of course also offer the Walkinshaw Performance. The Sport Pack upgrade that’s available on it came about because motor sport legend Tom Walkinshaw has got a farm in Oxfordshire not far from where I live and he’s always had an L200. However, he wanted one that would continue to do everything it does on the farm but handle like a performance car on the road so he gave an L200 to his engineers and asked them to do something with it.


What did they do?

They came up with a fully independent five-point multi-link rear suspension and it works perfectly.


Any other changes to L200?

We’re introducing a version with a load bed that’s 7in longer than the standard model, but on the same wheelbase and with sides with a straight upper edge. It costs from £750 more than the existing pick-up and will be sold alongside it. It addresses the criticism that L200’s load bed is too short, although to be honest I don’t think that’s something that has hampered our sales and it’s not a criticism I’ve heard voiced over the past couple of years. We’re taking an initial batch of 750 extended-bed L200s and it’s worth noting that the newcomer is available with a more powerful engine than its stablemate. High-specification models will be equipped with a 176hp, 400Nm, 2.5-litre diesel with the 134hp, 314Nm, 2.5-litre diesel used in the existing L200 fitted to lower-specification versions.


Will the 176hp engine be fitted to the standard L200?

It’s not available at present so we are continuing to offer that model with a 165hp power upgrade sourced in the UK.


How big a percentage of L200 registrations is taken up by four-door Double Cabs?

They account for the vast majority of sales. Single Cabs make up 8.5 per cent while the extended two-door Club Cab makes up five per cent.


How popular is the automatic gearbox?

Twenty-five per cent of the L200s we sell are fitted with it and that figure hardly varies at all. Some customers who do a lot of towing opt for the automatic because they believe it saves the clutch.


You also offer a van version of the short-wheelbase three-door Shogun 4x4. How well does that sell?

Around one-third of total Shogun sales in the UK are accounted for by the Shogun Commercial and we sold 350 of them in 2008. The Outlander Commercial 4x4 is responsible for 15 per cent of total Outlander sales and we sold 150 of them last year too, so they’re both pretty significant vehicles for us. During the first quarter of this year we sold 220 Shogun Commercials and 55 Outlander Commercials so they’re running ahead of what they achieved last year. Of course there aren’t too many alternatives to Shogun Commercial around these days, and with Outlander Commercial — a five-door — we’ve won contracts with almost all but one of the big telecommunications companies. It’s the right sort of price for them, it’s very capable off-road and you can get plenty of stuff into the load area.


Any thoughts about how effective the government’s much-publicised scrappage programme is likely to be?

I think it will generate business for us. Farmers with an old pick-up will like nothing more than taking money off the government for it and the scheme is a signal to people that it’s OK to buy a new vehicle. We’ll be signing up to it.


What can you offer customers who are environmentally-conscious?

L200 is of course already available with competitively-low 225g/km CO2 emissions. In addition we’re developing plug-in hybrids, we’ve developed an electric car and we’ve already got stop-start technology on some car models. These changes will clearly have an impact on our light commercial range — stop-start should be available across the entire Mitsubishi line-up within the next three years, but I wouldn’t be at all surprised if it arrives sooner than that — and we should have a hybrid Outlander on sale in less than three years time. First, however, we’ll be exhibiting hybrid technology on our new small crossover vehicle — the concept ZC — which could be marketed as a commercial vehicle as well as a car; we haven’t decided. ZC is about the same size as the Shogun Pinin five-door which was of course sold as a van.


Any plans to launch a replacement for the L300 van?

I’d like to, but we don’t have anything that’s suitable at present; and there’s nothing planned for the foreseeable future.



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