Mitsubishi’s Involvement in Alliance Drives Profitability for OEMs, Lenders

Mark Chaffin, Chief Operating Officer, Mitsubishi Motors North America (MMNA)

Mitsubishi Motors North America is in a “strong” position to deliver improved profitability, more appealing products, and advanced technologies, thanks to its participation in the Renault Nissan Mitsubishi alliance, newly appointed Chief Operating Officer Mark Chaffin told Auto Finance News.

Last month, the alliance reported a 14% increase in annualized “synergies” — the result of cost savings, incremental revenues, and cost avoidance. These synergies grew to $6.7 billion in 2017, compared with $5.8 billion in 2016. MMNA, for one, has benefited from its first year in the alliance, which drove total sales of more
than 10.6 million vehicles.

AFN spoke with Chaffin about how he intends to maximize the OEM’s operational strategies by leveraging the alliance to improve the dealer network, increase brand awareness, and adapt EV and plug-in hybrid electric (PHEV) vehicles into current lineups.

Auto Finance News: Since you’ve started your tenure with MMNA in 2007, you’ve helped grow sales and improve operational efficiency in the business unit – what are you going to implement in your new role as COO to enhance Mitsubishi Motors’ strategy?

Mark Chaffin: Our main goal right now is to continue the upward trajectory the brand is currently experiencing. We’re in our fifth-consecutive year of sales growth, just reported our best May sales in 11 years and calendar year sales are up 19.7% over 2017. This is huge for us, and I’m steadfast in my mission to keep that going. Our plan is to focus on big growth areas – mainly CUVs.

Our current lineup is strong, and we want to continue to bolster it even more. We launched two all-new vehicles for the 2018 model year – the Outlander PHEV and Eclipse Cross. Both vehicles are bringing new customers to our showrooms and represent the direction of MMNA moving forward. I’ll be working closely with all parties at MMNA to ensure we are collectively driving the business forward. To get this right, we need to work together and I plan to reinforce a united approach to continue establishing Mitsubishi as a true contender in the U.S. market.

Auto Finance News: What are your top three priorities for MMNA as COO?

Mark Chaffin: My priorities are rooted in the enhancement of our dealer network, brand awareness and our overall operational efficiency in the U.S. We’re working closely with our dealer body to get their input and really hear them out. They are at the core of our business and their opinion matters. We want to move forward knowing that we are going about this together.

Secondly, I want to continue building brand awareness and loyalty. Consumers are rediscovering Mitsubishi and they’re liking what they see. Our all-new 2018 vehicles, the Outlander PHEV and Eclipse Cross, are doing some of the legwork, but we are also focusing our marketing and public relations activity to help increase awareness. We have great products and need to continue showcasing that to the U.S.

Finally, I’m looking at all ways we can strategically improve network operations and development across the U.S. We’re now part of the largest auto alliance in the world with Nissan and Renault.  Together we are united in our approach and through Alliance synergies, we have access to an extensive network of suppliers, resources, and advanced technology that will enable Mitsubishi to accelerate at a much faster pace than we could have otherwise done on our own.

AFN: Your responsibilities include vehicle sales and dealer network. How do you intend on improving those aspects of MMNA?

MC: Dealer engagement is a big focus for us right now. We’re listening to what our dealers have to say, receiving their input and acting upon it to ensure we are aligned as we push the brand forward. We want to make sure our dealers know exactly where the brand is headed and we’re being fully transparent with them. We’re in the midst of an exciting turnaround and the only way we are going to continue to build the current momentum behind the brand is if we have complete buy-in from our dealers.

To further reinforce sales support for our dealers, we are leveraging the alliance to offer more comprehensive and diverse financial services. We’ve shown dealers a future vision of where we’re going from an alliance standpoint and highlighted how it will positively impact their business. There’s a lot on the horizon for MMNA and our dealers are excited about the possibilities ahead.

AFN: Recently, Renault-Nissan-Mitsubishi alliance reported a 14% increase in annualized synergies. What changes in the alliance practices are causing this rise?

MC: All members of the Alliance are coming to the table with something to offer. The 14% increase is allowing Mitsubishi to benefit from cost savings, incremental revenues and cost avoidance. Further convergence is underway in Aftersales, Vehicle Transportation, Quality and Customer Satisfaction. All three companies are working on developing future common platforms, with nine million units forecast to come from common vehicle architectures. This plan will also extend to the use of common powertrains to 75% of total sales.

We’re very excited about the possibilities that lie ahead of us that the Alliance will provide. It puts Mitsubishi in a strong position to deliver improved profitability, more appealing products and advanced technologies for our consumers. The Alliance has strong goals for Mitsubishi, and in order to achieve those goals, we need substantial gains in the key North American market.

AFN: What shifts in the industry are you currently noticing? What is your plan for Mitsubishi Motors to adapt?

MC: One of the biggest shifts in the industry is certainly the implementation of EV/PHEV vehicles into current lineups. We’re proud to be a leader in that segment, and it is one of the areas where we bring expertise to the Alliance. Our industry-leading PHEV system will play a pivotal role in implementing electric options across our core model range for future products. Mitsubishi’s global strategy is to focus on seven core models, for which an electrification solution (hybrid or electric) will be provided. Since this is a global policy, each region will have the ability to adopt all or some of these products, based on consumer preferences and the regulatory environment.

This Spotlight interview was originally featured in the July issue of Auto Finance News, out now

  Like This Post

Leave a Reply

X