While Canada Celebrates, North American Operations Swap Headmasters
If you happened to miss the cake and baloons at your one of 44 new Mitsubishi dealerships, the Japanese company's Canadian division celebrated its first year birthday yesterday.
But while experiencing excellent growth north of the 49th, the entire North American operations have had their share of ups and downs thus far in 2003.
Having to back off its aggressive sales projections from 400,000 units to 370,000, and that aided by deep incentives, overzealous fleet sales and underwriting loans to high risk borrowers, which inevitably eroded profitability, MMNA has seen better days.
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| Mitsubishi's North American operations have had their share of ups and downs, most recently resulting in former CEO Pierre Gagnon being replaced by ex-Hyundai CEO Finbarr O'Neill. (Photo: Trevor Hofmann, Canadian Auto Press) |
The result was the removal of Canadian born Pierre Gagnon as CEO, replaced by ex-Hyundai CEO Finbarr O'Neill on Tuesday, last week.
On the positive O'Neill feels that a complete overhaul is not necessary to turn the company toward a stronger bottom line, adding that "teamwork and better blocking and tackling will do it."
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| When CEO of Hyundai, Finbarr O'Neill pushed the Korean company hard for a North American style SUV, that eventually resulted in the popular Santa Fe, one of the brand's greatest success stories of recent years. (Photo: Hyundai) |
Arriving directly from his position as president of Hyundai Motors, the 51 year old O'Neill led the Korean automaker on an alternative approach of incremental product improvements, strong warranty coverage, and hardly any reliance on loan/lease rate incentives, rebates or fleet selling. The result has been steady growth topping out at 375,000 units in 2002, improved reliability and owner satisfaction. Now Hyundai is vying for sales that number four, five and six Japanese automakers Mitsubishi, Mazda and Suzuki are pursuing.
Gagnon's target of 500,000 sales by 2005 had been scoffed at by some leading auto industry analysts, and wisely O'Neill has not made any statements about achieving this goal. With Mitsubishi's total of 345,000 sales in 2002 fresh in his mind O'Neill stated, "We plan to grow the business... but we will never forget profitability."