Automotive News - February 11, 2008 - (Page 28) 28 • FEBRUARY 11, 2008 Present at the creation Sixty-five dealers were looking for their big break when they signed up to sell Mitsubishis starting in 1982. Here’s how things turned out for 10 who remain. Kathy Jackson kjackson@crain.com Unit sales quarter century ago, 65 dealers suspected that they were in on the ground floor of the next big thing. Sales of Toyota and Honda vehicles were taking off and retailers were on the lookout for other golden opportunities from Asia. Mitsubishi — best known for building Japan’s Zero fighter planes during World War II — had decided to sell vehicles in the United States. The chance of a lifetime for U.S. dealers? It sure seemed that way. A Mitsubishi store sounded like a terrific idea at the time, and it was for two decades. But the past few years have seen the Mitsubishi dream turn into a nightmare, according some of the 10 original dealers who still have the franchise. Dick Recchia, Mitsubishi’s first U.S. sales boss, remembers what it was like back in the early 1980s. “At that time, anything with a Japanese name was hot,” he recalls. Mitsubishi debuted here in 1982 and grew — more or less consistently — until the late 1990s. Then the brand seemed to catch fire. But disaster set in just as it appeared that Mitsubishi would break into the top tier of Japanese makes. Despite the recent years of hardship, Mitsubishi’s remaining charter dealers believe the brand still has a big future in the United States. JOE WILSSENS Dick Recchia, shown with a 1996 Mitsubishi 3000GT Spyder, was the company’s first U.S. sales boss. Ups and downs Mitsubishi debuted in the U.S. light-vehicle market in 1982 and grew moderately until the late 1990s, when its sales began to soar. Then disaster struck. Despite the recent problems, Mitsubishi’s remaining charter dealers say the brand’s U.S. future is bright. 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 '82 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 '06 Source: Automotive News Data Center Starting lineup Mitsubishi rolled out its first U.S. lineup for the 1983 model year. Its offerings included the turbocharged Starion sports car, the subcompact Tredia sedan, the compact Cordia hatchback and the Mighty Max small pickup. Mitsubishi Motors North America recruited about 65 charter dealers, primarily in California and on the East Coast. Today, 10 of those dealers remain with the company, after both good times and bad. Tito Roempke made Mitsubishi’s first U.S. sale — a Mighty Max. His Auburn Valley Mitsubishi dealership in Auburn, Wash., is still selling the brand. “I sold the very first vehicle — that was exciting,” said Roempke, 69. “The Japanese were all tickled pink because I sold the truck.” Over the past quarter-century, Mitsubishi stopped U.S. sales of the Mighty Max because of high import taxes on trucks. It introduced the popular Eclipse sports car and built a plant in Normal, Ill. Mitsubishi enjoyed robust U.S. sales throughout the 1990s and early 2000s, peaking at 345,111 vehicles in 2002. More recently, though, Mitsubishi’s breakup with DaimlerChrysler AG and an ill-advised financing program put many of its U.S. dealers in the red and nearly caused the company’s North American unit to go under. Last year Mitsubishi reported U.S. sales of 128,993 vehicles, up 8.8 percent from 2006. Roempke, who also operates Hyundai, Kia, Mazda and Suzuki From top, the Starion, Tredia and Cordia were part of Mitsubishi’s original lineup in the United States. would have a good plan in the U.S.” Seidle’s Miami charter dealership became Mitsubishi’s top U.S. retailer in 1992, when it sold nearly 2,000 cars and trucks. He concedes that the past few years “have been pretty weak.” “Any franchise has good and bad years,” Seidle says. “As a dealer, you have to understand that.” zero,” Seidle says. “All of the cars were coming back. The repos were costing the company a lot of money. That almost put them out of business.” Bill Lehman, another Mitsubishi charter dealer who operates several franchises in south Florida, agrees. “We had rough times with the credit debacle,” Lehman says. “We got caught in that trap. We were worried about making money month to month.” During Mitsubishi’s lean times, dealer Cohn says he has had to rely on parts and service sales to “help us weather the storm.” Given Mitsubishi’s problems in recent years, why have the charter dealers stuck with the brand? Cohn cites a “fantastic improvement in product” since 1982. And he says the company has built on a solid base. Lehman describes a “family atmosphere” among veteran Mitsubishi dealers. “Starting with so few dealers, we were a group of friends — a big, expanded family,” he says. “You knew the dealers by their first names. Despite the credit debacle, this has always been a very dealer-sensitive organization.” Other charter dealers talk about their good times with Mitsubishi. Seidle praises the 3000 VR4 Spyder, a retractable-hard-top sports coupe launched in 1995. It shed its top in about 30 seconds, Seidle recalls. “Mitsu is very innovative, with a lot of technical expertise,” he says. Roempke said the customer demand at his dealership for the first Eclipse in 1989 nearly got out of hand. “Twenty people were competing for an Eclipse,” he said. “I had never experienced that before.” franchises, said he remains loyal to Mitsubishi. “I have lost a lot of money with Mitsu, but I was also extremely profitable with the franchise,” Roempke told Automotive News. “Mitsubishi was the reason I could buy the other franchises.” In 1980, Mitsubishi named Recchia its top U.S. executive. A veteran of Chrysler Corp. and Fiat’s and Ferrari’s U.S. distributors, Recchia was hired to recruit dealers and get U.S. sales rolling. port vehicles. In 1983, Mitsubishi’s first full year in the United States, the company sold 42,072 cars and trucks. “As allocation increased, the plan was to add dealers on the Gulf Coast” and in the heart of the country, Recchia says. “Our plan was about 250 dealers for the whole U.S.” Here to stay The charter dealers insist Mitsubishi still knows how to succeed in the United States. But the fact they own other automakers’ franchises has made it easier to stay with Mitsubishi, they concede. “If I was a single-line Mitsubishi dealer, I could not make it,” Roempke said. These days, Roempke said, he sells about 10 Mitsubishi vehicles a month. That’s a far cry from the mid-1980s, when his monthly sales of the Mighty Max alone approached 50 units. “But I think the future is bright,” Roempke said. “Mitsubishi was known as the BMW of Japan — hightech turbo cars. They got away from that and wanted a car for everybody. “They’re now realizing they’re a niche car company, not a mass producer. They plan to go back to hightech. It will be a company to be reckoned with.” Seidle expresses similar optimism. “I see Mitsu with a good future,” he says. “They can do diesel and electric. The new Lancer and Evo have been good news. They can’t compete with Chevy and Toyota, because they don’t have the money, but they could be the leaders in technology.” Adds Seidle: “We’re happy with Mitsu. There are only 10 of us who made it.” c Growth spurt But by 1989, Mitsubishi had 300 U.S. dealers. That year, the automaker introduced the Eclipse to replace the Starion. That was the year production began at Diamond Star Motors Corp., an assembly plant in Normal, Ill., that was a joint venture of Mitsubishi and Chrysler. In 1991, Mitsubishi purchased Chrysler’s share and took full control of the plant. “Opening the plant was a big deal,” says Michael Seidle, who owns two Mitsubishi dealerships in the Miami area. “Then we knew they were here to stay. The new Eclipse also was a real big plus.” Seidle, 59, and his father, Bill, owned Chevrolet and Datsun (now Nissan) dealerships when they signed up with Mitsubishi in 1982. “We were taking a chance,” Seidle says. “We had to build a new standalone facility. It was an expensive undertaking. The name was not very well-known worldwide, but this was another Japanese line we thought Credit fiasco Recchia retired in 1997. Under his successor, former General Motors executive Pierre Gagnon, Mitsubishi’s U.S. sales rose from 190,515 vehicles in 1998 to nearly twice that number in 2002. The company’s dealership count swelled to more than 600. Dealers spent heavily to build or renovate stores. Gagnon predicted annual U.S. sales of 500,000 units. Then the bottom fell out. A popular “triple-zero” finance program — no down payment, 0 percent financing and no payments for a year — that Gagnon created in 1999 turned sour when many buyers defaulted on loans. By 2003, Mitsubishi’s U.S. credit losses were huge, and the parent company was bleeding red ink. Gagnon left under fire. Dealers complained to Gagnon’s replacement, former Hyundai Motor America CEO Fin O’Neill, about a sparse product lineup and inadequate marketing support. “What hurt us most was zero-zero- ‘We started from zero’ “A lot of dealers were interested,” Recchia recalls. “We required exclusive stores, so dealers with money or a facility in the region had a leg up. “It was an exciting time, because we started from zero. The charter dealers were wonderful.” Mitsubishi held its first dealer meeting in 1982 in San Francisco. In attendance was Buzzy Cohn, who opened a Mitsubishi dealership that August in Rockville, Md. “I got in on the ground floor with Honda in 1973, and it was very good,” says Cohn, 62. “So I thought in 1982, ‘This is another opportunity.’ ” Mitsubishi had to start small because volume quotas then limited the number of passenger cars that came into the United States. Mitsubishi shared its allocation with Chrysler, which got most of the im-
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