Muscle cars

Mitsubishi Motors is zooming its way into the Canadian marketplace with beefed-up online marketing plans, some imaginative sponsorships and an emphasis on athleticism

The Canadian auto market isn’t known for lots of movement, so when a company goes from non-existent to noteworthy in a couple of years, it’s worth finding out what’s revving its engines.

Seven years ago, Mitsubishi Motors didn’t even exist in Canada. The Japanese autoco has been operating in the U.S. for two decades, but only made its way into the Canadian market in 2002. At first, it blended in quietly, with modest sales of vehicles that didn’t really stand out in a crowded marketplace. But things are changing. In mid-2007, Mississauga, Ont.-based Mitsubishi Motor Sales of Canada Inc. (MMSCAN) reported year-to-date sales up nearly 40%, and the growth is continuing this year, with June 2008 sales up 20% over last June – sales of the Lancer are up a whopping 64% over the same period – and year-to-date sales up 18%.

‘Mitsubishi went from one of the worst performers in 2004 to leading the industry with 53% growth over last year [2006-07],’ says Larry Futers, who was recently director of marketing at Mitsubishi and is now VP at Infield Marketing, which works with Mitsubishi on current programs.

That’s pretty impressive for a newcomer in a market where manufacturers fight over every bit of share and have introduced more cars over the past two years than ever before – and where skyrocketing gas prices and dollar fluctuations are compounding those pressures.

In some ways high fuel prices are actually working in Mitsubishi’s favour, as consumers abandon gas guzzlers for more fuel-efficient models like Mitsubishi’s Galant and Lancer. Further assistance came in 2005, when the company’s Tokyo head office changed its management structure so that Mitsubishi Canada now reports directly to Japan instead of going through the U.S. That was, according to Futers, ‘one of the single best things that happened to the organization.’ Under the new system, Japan no longer receives reports based on U.S. market interests like pickup trucks and SUVs. Instead, they favour the fuel-efficient models the Canadian market wants. ‘What that provided to Mitsubishi Canada was freedom – the ability to stand on its own two feet,’ says Futers, who helped develop Mitsubishi Canada’s ‘Go Far’ tagline.

In 2006 Mitsubishi brought in former Europe CEO Koji Soga – who has spent nearly 40 years with the company in various roles, including product planning and corporate responsibility – as president and CEO of Mitsubishi Canada. Soga’s mission is to meet his division’s needs, whether that means a parts distribution centre, funding or market-appropriate products, and help it liaise more easily with Japan.

Under Soga, Mitsubishi’s product portfolio has been realigned to Canadian sensibilities. The company currently sells seven models in the Canadian market: the Outlander and Endeavor SUVs, Galant sport sedan, Lancer sedan, Lancer Evolution sports sedan and Eclipse coupe and Spyder.

In order to compete with similar models made by Toyota and Honda, Mitsubishi Canada introduced a new price point that made its cars five to 10% less expensive than their competition. It also launched the industry’s best warranty program (a five-year or 100,000-km bumper-to-bumper, plus a 10-year or 160,000-km limited powertrain warranty and a five-year roadside assistance plan) to demonstrate its confidence in its products.

And they’re becoming more vocal in the marketplace as well. Since Mitsubishi’s young demo entails a greater focus on online marketing, Winnipeg’s DMT Development Systems retooled the website to make it more user-friendly. AOR, Toronto-based BBDO Canada, and its interactive subsidiary, Proximity, as well as Toronto’s OMD, are also concentrating on digital marcom including banner ads and social media sites.

In addition, the Canadian division has made particularly good use of Mitsubishi’s worldwide brand positioning, which is based on the spirit of athleticism, combined with reliability and durability. A striking example of that is the ‘Robot’ commercial for the Eclipse, which features computer-generated athletic ‘bots on a Mitsubishi assembly line. The ad was picked up by the U.S. division – a first in Mitsubishi’s history – and ran during the NBA playoffs.

‘There’s been a greater focus on the positioning of the brand and what it stands for,’ explains Mitsubishi Canada’s director of marketing, Peter Renz. ‘The reality is that we’re pretty small in this market – we’re at 1% market share right now – so we’re under the radar. We’ve got less money to spend, so we have to spend it smarter and try to get the most results for the least amount of money.’

Renz, who came to Mitsubishi in April after marketing stints at Hyundai and Lexus and two decades in the agency business, says the company is not resting on its ‘Robot’ laurels, challenging BBDO to extend the buzz into other executions, and pursuing other options. One is an in-game ad deal with Mississauga-based Massive Network that cleverly touches on Mitsubishi’s long history in car rallies.

‘We buy titles like Need for Speed; there are billboards in the background and they sell that space,’ he says. ‘It’s interesting – the people who play these games are 30 plus, and they spend a lot of money to play. They’ve got high disposable incomes and typically go online because they want the realistic experience.’

Mitsubishi Canada also works that balance between athleticism and automobiles with its sponsorship of rally programs, and a promotion with The Score Network which asks consumers to vote on the best athletic moment of all time. ‘That was another way for us to tightly knit this spirit of athleticism around the Mitsubishi brand,’ says Futers, who instigated Mitsubishi’s sponsorship of the City Chase program in 2007. City Chase is a kind of urban adventure/scavenger hunt in which teams race to find clues around a city. The event, which takes place over the summer in seven Canadian cities, premiered on CBC June 30 and airs Monday nights through to the Canadian championship at the end of September.

Right to Play, an organization that uses sports to help kids in developing countries, receives some of the proceeds from City Chase, in addition to a separate donation-with-purchase promo. ‘For every car we retailed, we gave them $100, and I think they got almost a half a million,’ says Renz. ‘It’s a way to stand out, to say we’re a small company but we still want to give back to the world.’

The Canadian launch this year of the Lancer Evolution X, or Evo – a more powerful version of the Lancer that has long been Mitsubishi’s official model for world rally championships – also brought the company some much-needed brand attention.

‘It’s got a cult following,’ says Renz. ‘It’s done well in rallies, and it’s been featured in many video games. A month after I joined Mitsu, I took an Evo home for the weekend, and when I drove into my local Tim Horton’s, all these kids came out with their camera phones and started taking pictures. I thought, ‘Now that’s brand power!’ I’ve driven some nice cars in the past, but that’s never happened to me. And these are 18- or 19-year-old kids. So I thought, ‘This is interesting!”

Mitsubishi Canada is also experimenting with initiatives to increase the number of dealerships across the country, which now stands at 69 with the June opening of a deluxe showroom in Gatineau, Que., which features a library, shower, big-screen TV and gym. Under Soga, the company is also stressing daily communication with dealers to make sure everyone’s on the same page.

Another innovation is customized online brochures featuring consumers’ names, locations and other preferences. ‘It makes us stand out and get a little closer to the customers,’ says Renz. ‘We do a lot of neat things. We have to. I only have three people on my marketing team, and it’s not like we have a $100-million budget. But you still have to do all the stuff you need to do.’

We sat down with Koji Soga and Tomoki Yanagawa, VP sales/marketing and corporate planning, to find out more about their plans for navigating the crowded Canadian market.

The car business is extremely competitive in Canada. How has Mitsubishi Canada managed to grow in this climate?

Koji Soga: The market has been changing because of the influence of the U.S. We are a newcomer, so we make our own strategy. We don’t think about Toyota or Honda. They have a 40-year history; they have factories here and are 10 times bigger than our operations. We are just improving, year by year.

What are your goals?

Tomoki Yanagawa: To build a strong brand in Canada. We need to be different from other Japanese brands. People think of Sony, Panasonic, Lexus, you name it, it stands for quality and reliability and precision. We definitely benefit from being a Japanese brand, but we have to differentiate ourselves from Mazda, Subaru and Toyota. We have to be the brand that’s chosen because it’s Mitsubishi, not because we’re the most affordable among Japanese cars.

In 2005, Mitsubishi Motors Canada started reporting directly to head office in Tokyo instead of the U.S. How has this affected the company?

Soga: American people can manage the U.S., and Canada should be managed by Canadians. Mitsubishi has put a priority on the Canadian market, and that’s why they dispatched me here. I made some structural changes, and everything is better, our dealers are happier, and now we have to keep this momentum up. I don’t know how long I will stay; I think a Canadian president should be hired.

What’s most influencing automobile purchases in Canada?

Soga: Everyone is very concerned with fuel consumption. Pickup trucks and vans are heavy on fuel consumption, and the demand is moving to downsize to much smaller cars.

Yanagawa: Even within the same model they will tend to go toward less fuel consumption. We’re adding a new model to the Lancer family, the [fuel-efficient] Sportback, next spring.

What is your flagship brand?

Soga: So far, we haven’t had a flagship car, but this year we introduced the Lancer Evolution, a very high-power, sporty sedan. The Lancer Evolution has a long history in Europe, Asia and the U.S. In Canada we couldn’t bring in the Evolution before because of special safety regulations [the bumper initially didn't meet Canadian standards, but does now].

Yanagawa: It’s an icon, but the Lancer Evolution is not designed for everybody’s everyday purposes. It’s a bit special. In a way, it’s sacred. It’s almost a racing car that’s allowed on the road. It’s targeted toward higher age groups, with higher incomes, who can be responsible for handling this kind of power – 45 to 50 years and older.

How do you create the must-have Mitsubishi car within all your different segments and models?

Soga: One of our selling points is our long-term warranty based on reliability and durability, because we have confidence in the quality of our cars.

Yanagawa: Our brand is defined by three core values: athleticism, durability and reliability. This has been the DNA of Mitsubishi Motors. And I think it has been proven by the victories in various rally sports, including 34 overall wins in the World Rally Championship.

What would you say is the level of your brand’s awareness right now?

Yanagawa: It’s low. If it’s non-aided, not many people would bring up Mitsubishi’s name. Probably 5%. A 15% awareness level is what we’re aiming for.

So how are you building that?

Yanagawa: With time and sales. We can only prove ourselves through results, and although we are the quickest-growing brand in the market, it simply means that we were too small in the past. We are not on the radar of many Canadian consumers, and that is a challenge.

We can’t double our budget for advertising or PR. Our marketing budget is to be spent more efficiently, but it’s more important that we consistently send out the message of being an athletic, durable, reliable brand.

In the past we were simply running U.S. ads; now we create our own. If you look at our recent TV commercials, we think we have succeeded in giving a new perspective in car advertising. These commercials combine athleticism and durability; the robots are building the cars in a very athletic manner. There is no super weapon that we can implement, it’s down to basics. By utilizing all our channels and keeping our message consistent, that will allow us to be competitive in this market.

How’s it working?

Yanagawa: Through our marketing activities I think we have been able to build the awareness level gradually, and the image that consumers used to have toward Mitsubishi is changing. Before, it was, ‘I know nothing about Mitsubishi.’ That was almost all the answer that we got. Now we get, ‘It’s a sporty brand’ and ‘a durable brand’ and, of course, our warranty helps in building that image. I think we’re on the right track. It’s just a matter of time and budget.

What made Mitsubishi decide on ‘athleticism’ rather than, say, ‘sporty’?

Yanagawa: ‘Sporty’ is broad. We wanted to make it more defined, so that when we talk about sportiness we mean a sportiness that’s built for purpose. Athletes have goals. If you’re a 100-metre runner, you will build your body towards your target. Being athletic means it’s not just cosmetic sportiness. Being athletic means it has a purpose that it has been built for.

How do you think ‘athleticism’ appeals to the Canadian market specifically?

Yanagawa: Everyone likes sports, but the climate and geography here are different from the U.S. I think Canadian consumers are more in line with what we think is the value of the brand, and more in tune with athleticism, and we strongly believe that we can offer what would suit Canadian market demands.

We support City Chase, the CIS (City Inter-college Sports championships) and other athletic activities that we think match with our brand. And this past spring we established our partnership with Right to Play, the organization that helps underprivileged children in developing countries and allows them the right to play sports.

The brand direction in the U.S. is not quite the same. They have been using ‘Driven to Thrill’ for their tagline: the young, hip, edgy brand. We felt that Canadians are more down to earth, and our brand is also more down to earth. No disrespect to what they are doing in the States, and ‘Driven to Thrill’ would resonate to a certain community here, but we feel the market here is more practical.

Canadians are not about being extravagant or fancy. It’s minus 50 degrees, you have to be able to start your engine, get to work and come back safely. The all-wheel drive and all of the assets that we have make a product that we believe could be that athletic, durable brand that would resonate with Canadian consumers.

How do commercials about athletic robots resonate with consumers?

Yanagawa: We don’t want to be wallpaper, so when we create our advertising we try to grab attention. I think we have been very successful with our partner BBDO Canada in creating those ads. It’s easy to say, ‘We’re sporty, we’re durable’ by showing the car running around, but that’s what car advertising has been doing for decades. We wanted something different; a ‘wow’ factor, if you will.

We did online surveys and we got feedback that customers not only thought our ad was fun, entertaining and gives a sense of sportiness, but that the car must be sporty and athletic at the same time. I thought that was a great result. Our dealers like it, and a lot of the customers who come into our showrooms talk about it. Our Eclipse and Spyder sales have gone up significantly since the ad launched. It’s proven its viability for not just creating a fun, nice-to-have ad, but bringing results.

What kind of initiatives are you going to be launching in the near future?

Yanagawa: Having the youngest demographic in our competitor set means our customers are more connected online, so our focus is on web marketing. We constructed our website, completely renewed it, and it’s been very well received. And we’ve been building lots of sitelettes to increase our awareness and communications.

What are your future goals?

Soga: We just created our five-year long-range plan to change our management team. We’ll get a clearer picture in a five-year period. Our brand awareness goal is 15%. We’re using Kia as a benchmark. They’re at 23% after 15 years. We only have a five-year history, so five years from now, we’ll be at maybe 15 or 20%.