Not so honourable death of the 380 san!
February 5th 2008 13:36
Well it had to happen eventually! I dont wish to sound flippant but the writing has been on wall for years.
Mitsubishi, have for many years have been a company that prostitutes their own products to shift metal. They have traditionally sold a high volume of heavily discounted vehicles to rental car/ leasing companies to keep themselves afloat. This perpetuates their problem, the short term leases or buybacks kick in about nine to ten months after delivery, the cars get returned to the manufacturer and this then swamps the market in used Mitsubishis. You only have to look at any major Australian newspaper over a period of months to see the price of used Mitsubishi products tumble. The 380 is a prime example, six months ago they were advertised at $21990, same car last month $ 17990.Now that this news has broken, who knows $14990?
Mitsubishi shot themselves in the foot on the release of the 380, their plan was to basically exile all their loyal fleet buyers by announcing that there would be no fleet discounts, Mitsubishi had decided to chase the private buyers, thus giving them a better profit margin, unfortunately they stayed away in droves, so Mitsubishi slashed the retail price of a base model from $ 32990 to $27990 overnight and started knocking on the rental car companies doors once more. It was a vicious circle and the circle is now broken.
Mitsubishi Motor Company is no stranger to these circumstances, they closed the New Zealand assembly operation some years ago and became an importer, this did little to affect their sales volumes on the Enzed market. The death of the 380 and the closure of the plant is a shame especially for all the employees who face an uncertain future, but basic economics tell you about supply and demand. If you cant sell them, why build them? Now matter how hard you try you cant run a production facility on a third or a quarter of capacity.
As major corporations bleed money, this may not be the last we see of events like this, have you checked how many Falcons Ford have sold lately?
Would the last person leaving Tonsley Park please turn off the lights and dont trip over those 380s on the way out!
Mitsubishi, have for many years have been a company that prostitutes their own products to shift metal. They have traditionally sold a high volume of heavily discounted vehicles to rental car/ leasing companies to keep themselves afloat. This perpetuates their problem, the short term leases or buybacks kick in about nine to ten months after delivery, the cars get returned to the manufacturer and this then swamps the market in used Mitsubishis. You only have to look at any major Australian newspaper over a period of months to see the price of used Mitsubishi products tumble. The 380 is a prime example, six months ago they were advertised at $21990, same car last month $ 17990.Now that this news has broken, who knows $14990?
Mitsubishi shot themselves in the foot on the release of the 380, their plan was to basically exile all their loyal fleet buyers by announcing that there would be no fleet discounts, Mitsubishi had decided to chase the private buyers, thus giving them a better profit margin, unfortunately they stayed away in droves, so Mitsubishi slashed the retail price of a base model from $ 32990 to $27990 overnight and started knocking on the rental car companies doors once more. It was a vicious circle and the circle is now broken.
Mitsubishi Motor Company is no stranger to these circumstances, they closed the New Zealand assembly operation some years ago and became an importer, this did little to affect their sales volumes on the Enzed market. The death of the 380 and the closure of the plant is a shame especially for all the employees who face an uncertain future, but basic economics tell you about supply and demand. If you cant sell them, why build them? Now matter how hard you try you cant run a production facility on a third or a quarter of capacity.
As major corporations bleed money, this may not be the last we see of events like this, have you checked how many Falcons Ford have sold lately?
Would the last person leaving Tonsley Park please turn off the lights and dont trip over those 380s on the way out!
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