How does Phoenix fit in? The Tokyo office is tied closely with Mitsubishi Tokyo Financial Group, the owner of MMC's main creditor bank. Phoenix will receive common shares in MMC for its capital injection, making it majority shareholder with 40 to 50 percent voting rights. Not having a lot of other options, The Mitsubishi group of companies will hold preferred stocks only, with no voting rights. Incidentally, MMC's market capitalization hovers around 366 billion yen (CAD$4.46 billion).
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| Phoenix will receive common shares in MMC for its capital injection, making it majority shareholder with 40 to 50 percent voting rights. (Photo: Trevor Hofmann, Canadian Auto Press) |
With DaimlerChrysler having declined to offer financial support to MMC last month, only committing to not sell its 37.3 percent stake holding, Mitsubishi has been left looking to alternative partners to raise much needed capital.
Fortunately for Mitsubishi North America many of its core models are new for 2004, most of which have been praised by the automotive press (the new Galant midsize sedan and Endeavor midsize sport utility vehicle especially), with others such as the Lancer compact sedan and sport wagon, plus the Outlander compact SUV having been updated only last year.
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| Once Mitsubishi secures its capital, it is possible stronger incentives will be forthcoming to boost sagging sales. (Photo: Trevor Hofmann, Canadian Auto Press) |
But in today's incentive driven market, Mitsubishi retailers, selling a brand that is not marketing its vehicles as aggressively as the domestics, are struggling to woo consumers down to local dealerships. Some dealers are even pushing for a return to ex-CEO Pierre Gagnon-style deep incentives. Once Mitsubishi secures its capital, it is possible stronger incentives will be forthcoming to boost sagging sales, down 34 percent in the U.S. in April.
Until then retailers will have to make do, along with all those connected to the Japanese automaker who are awaiting a revitalized business plan expected Friday, May 21.