AAP General News (Australia)
08-02-1999
SA: Mitsubishi in marketing push as closure talk continues
By Tim Dornin, National Motoring Correspondent
ADELAIDE, Aug 2 AAP - Car maker Mitsubishi Motors Australia Limited (MMAL) today cut prices
across its locally produced Magna and Verada range as it continued to talk up the future of
its Australian manufacturing operations.
Faced with continuing rumours of an imminent closure, Mitsubishi slashed prices by between
$1,000 and $3,500 on individual models as part of a new marketing strategy.
That followed recent management changes designed to improve the company's share of the
fleet market in Australia and lift its flagging domestic sales.
The renewed marketing push came as Mitsubishi was again faced with media reports that it
might be forced to shut down in Adelaide as it struggled to remain competitive with cars and
parts imported from Japan.
Managing director Mike Quinn branded the reports scurrilous and untrue.
Mr Quinn said nothing had changed since a meeting earlier this year when the parent company
in Japan asked him to develop a strategic plan for producing the next generation Magna in
Adelaide.
At the same time, he said he was also asked to produce a restructuring plan to reduce the
cost of car production in Australia.
"It is the usual process we go through every time we go through the approval steps for
model replacement," Mr Quinn said.
Political leaders also jumped to Mitsubishi's defence with South Australian Premier John
Olsen saying the company had clearly indicated it was "here for the long haul", while
Opposition Leader Mike Rann called for the mischievous and damaging reports about Mitsubishi
to cease, and for governments to meet all Australian car makers to discuss trading pressures.
"Mitsubishi and all Australian auto, car parts and accessories manufacturers face genuine
challenges in the next few years," Mr Rann said.
"There needs to be urgent talks with all car manufacturers about how the current tariff
regime and trade conditions within our region are affecting the local industry."
But despite the comments, there was no doubt Mitsubishi was doing it tougher than the other
local car producers in 1999.
To the end of June this year it was the only company among the four producers to suffer a
fall in domestic demand with sales for the six months down 20 per cent, compared to the same
period last year in a total market, which was down only about one per cent.
In May, it also reported a slim profit of just $3.6 million for 1998, down from $106
million it made in 1997.
In its announcement today, Mitsubishi said it had cut $1,060 from the price of a base model
Magna, and up to $3,500 off some Verada models as part of an overhaul of its marketing and
advertising strategies.
Director of sales operations, Ian Ludgate said the price cuts were designed to make the
Magna and Verada the best buys among Australian made vehicles.
He said the company was also keen to be more competitive in the fleet market, traditionally
dominated by the Ford Falcon and the Holden Commodore.
"Our approach will be to treat each fleet individually and reward owners and managers who
take higher volumes of our cars," Mr Ludgate said.
"These changes have been made after listening to our dealers at a series of meetings
throughout the country, and from face-to-face interviews with a number of fleet operators,
together with market research with recent buyers of both Magna and competitive products."
AAP tjd/adh
KEYWORD: MOTOR MITSUBISHI (CARRIED EARLIER)
1999 AAP Information Services Pty Limited (AAP) or its Licensors.
