INVESTIGATION
Going, going, gone – but it isn’t all gloom and doom for brands Following Mitsubishi’s announcement that it was freezing new model launches for the European market, we look at the brands most likely to go, those that have already gone – and those merrily bucking the trend.
M
itsubishi shocked the industry when it said it would halt all new model launches in Europe for the foreseeable future. Parent company Mitsubishi Motors Corp reported a loss of 176.16bn yen (circa £1.3bn) for the first quarter of 2020 against a 9.31bn yen (£68.7m) profit for the same period in 2019, while the cost of meeting Euro 7 regulations was seen as a commitment it could no longer justify based on its sales volumes across the continent. Instead, it will be looking to focus more on its core business area of the Association of Southeast Asian Nations region as it looks to cut costs by 20 per cent. The news took Mitsubishi’s importers and dealers by surprise and looks like it will sound the death knell for the UK operation of the company – not least because its sales have already slumped by nearly 50 per cent year on year following three successive annual declines.
Mitsubishi
90%
chance of demise For a short while, Mitsubishi enjoyed a position as an innovator, with its Outlander PHEV leading the popularisation of plug-in hybrid technology. The SUV was the best-selling PHEV for three years, but as more mainstream and arguably more desirable competitors caught up, the Outlander became less desirable and ultimately grew outdated. Aside from that, the below-par and slow-selling Mirage and curious but all-too-quirky ASX crossover were not enough to deliver the sales volume needed to stay in the market. The L200 pick-up is the only Mitsubishi model to remain class-competitive, but the cost of re-engineering it for Euro 7 could well force its demise. If not, it’s likely to remain the only Mitsubishi on sale here, with the importer, Colt Car Company, already looking at alternative brands with which to support its network.
Subaru
50%
chance of demise While Subaru’s importer, International Motors, remains upbeat about the brand’s future, the dealer network isn’t quite as convinced, despite an improvement in NFDA survey results in 2018, where it climbed 12 places. Until recently, Subaru simply didn’t have the product to make sales in the UK work properly – the oddball Levorg, mediocre Impreza, adequate XV and fun-but-specialist BRZ weren’t enough to deliver the market share it needed, and while the announcement of hybrid models will help fill the gap, the brand’s WRC-winning heyday is a sadly distant memory. Existing customers are fiercely loyal, but new ones are getting increasingly rare.
DS
30%
chance of demise Before lockdown hit the car market square on the jaw, owner PSA was making noises about a long-term commitment and growth plan for its sub-premium DS brand. More recently, brand boss Alain Descat told Car Dealer that it was ‘here to stay’ and that it was possibly a 20-to-25-year strategy that it needed to see real growth. But PSA boss Carlos Tavares will be expecting to see the cash register ringing before the parent company truly commits – he’s renowned for being a turnaround man and has done wonders for Citroen, Peugeot and, latterly, Vauxhall-Opel. But with the three volume brands now facing huge bounceback challenges, DS could be a problem he doesn’t need.
Cupra
30%
chance of demise Tracking Cupra’s sales performance is tricky as registrations are still reported through Seat, but the Spanish brand’s desire to have a performance spin-off might not last – VW Group has enough on its plate rebuilding sales across its portfolio in the wake of the pandemic while still handling legal action that goes back to the 2015 emissions scandal. If Cupra doesn’t appear to be contributing big numbers to the brand’s performance, and with models such as the Ateca hardly recalling the glory days of Cupra as a model name as well as the Leon 180 building on BTCC success, it could be seen as a stretch too far and the name returning to being a trim level alone. 8 | CarDealerMag.co.uk
