Why Mitsubishi Left India?
Mitsubishi’s Outlander and Eclipse Cross have made their mark in the international market, but the brand’s recent performance in India has been subpar. The last vehicle from Mitsubishi in India was sold in January 2020, and it’s been two years since any new model was launched. Despite the popularity of Mitsubishi in India, the brand seems to have lost traction.
Mitsubishi Entry in India
The initial success in 1998, when Mitsubishi was officially launched in India, and the collaboration with Hindustan Motors for the production of their vehicles, created a positive market perception. However, recent developments indicate a decline in sales and visibility.
In contrast, other international brands like Ford and Mahindra successfully launched and assembled their vehicles in India, establishing a stronger foothold. Mitsubishi, on the other hand, faced challenges in adapting to the changing Indian automotive landscape.
In 2012, Mitsubishi attempted a comeback with the launch of the Pajero Sport, aiming to compete with popular SUVs like the Fortuner. Despite its commendable features and off-road capabilities, the sales didn’t match expectations. The brand struggled to keep up with competitors, especially with the imminent launch of the 2022 Mahindra Scorpio.
Challenges Faced by Mitsubishi’s Dealerships
Mitsubishi’s lack of consistent updates and innovations, coupled with the entry of new players, impacted its market share. The Indian market witnessed the launch of updated versions of popular SUVs, like the Ford Endeavour and Hyundai Creta, further intensifying the competition.
In 2012, Mitsubishi introduced the Pajero Sport, an updated version of the Montero, with impressive looks and a robust stance. However, it failed to gain significant traction in the market. The brand faced challenges not only from Mahindra but also from the upcoming 2022 Mahindra Scorpio.
Mitsubishi Rivals
The Mitsubishi Outlander SUV, though technologically sound, struggled with pricing issues. While it provided excellent features and performance, its higher cost compared to competitors like the Toyota Fortuner affected its sales. The scenario took a turn in 2012 when Mahindra announced the launch of the updated Scorpio in 2022. This news, combined with Mitsubishi’s ongoing challenges, prompted concerns among enthusiasts. Amidst this, Mitsubishi’s India operations continued to function more as a franchise model. The brand refrained from direct operations and relied on collaborations with Indian manufacturers.
Recent rumors suggest that even Tesla is preparing to launch in India, further reshaping the landscape. Mitsubishi, facing the resurgence of strong contenders, needs to reassess its strategy to regain a significant presence in the Indian market. Substantial improvements in design, features, and competitive pricing are crucial for the brand’s revival.
Now, talking about successful companies in India, let’s take the example of Hyundai. They analyze the Indian market thoroughly. When they see a product working well in the Indian market, they launch it here, like the Creta and Venue models. Similarly, Mitsubishi is making strides with its Outlander in Japan, and it’s doing well.
In the car market, brands like Hyundai have been successful by manufacturing specific cars for India, tailoring them to the Indian market’s needs. On the other hand, Mitsubishi is launching old-generation cars in India, like the Pajero Sport, which is already outdated. Instead of launching their latest generation in India, they’re importing the older version and selling it. This strategy may not appeal to Indian consumers.
Another mistake they made was launching the old generation of Pajero Sport in India when the new generation is already available abroad. Even the facelift of the old generation has been launched, but they decided to import the old one to India.
Mitsubishi’s Failed Revival Attempt
Moreover, Mitsubishi failed to consider that the Indian market requires specific features and a competitive price. Instead, they just imported the car and hoped it would sell well in India. This lack of understanding of the Indian market led to poor sales. This is a significant downfall for the company.
Furthermore, Mitsubishi made another mistake by not launching their latest models in India. If a new generation is available abroad, launching the older version in India at a reduced price could have attracted more customers. But unfortunately, they chose not to do so.
Mitsubishi has a division with six registered employees, and unfortunately, all six are at my home. There’s only one communication punch, and the once-prominent Mitsubishi, with 48 different dealerships across India, has now closed all of them. Some dealerships have even alleged that Hindustan Motors hasn’t returned their security money, and legal battles are ongoing.
Will Mitsubishi Come Back to India ?
In the world of automobiles, companies like Isuzu and General Motors also faced challenges in India. Open Company, launched in India, faced its own set of issues. The point is, many brands have struggled after entering the Indian market. Recently, Mitsubishi was planning a new deal with an Indian component maker, investing ₹500 crores to establish a local supply chain and a new factory. This move could have revived the brand’s fortunes in India. However, it’s been two years since any updates on this development.
Mitsubishi’s spokesperson mentioned in 2020 about the launch of several cars in the BS6 format, competing with models like Hyundai Creta, Toyota Fortuner, and Isuzu MU-X. However, none of these launches have materialized. Mitsubishi had great potential in India due to its recognized reliability and the appeal of models like the Pajero Sport. However, the brand failed to make necessary changes for the Indian customer and improve its supply chain. The missed opportunities have led to frustration among enthusiasts.
Final Verdict
In conclusion, Mitsubishi’s promising entry into the Indian market has been marred by mismanagement, legal disputes, and a failure to adapt to the needs of Indian consumers. Despite initial potential, the brand’s inability to capitalize on its reliability and iconic models, coupled with a lack of updates and strategic planning, has led to disappointment. The missed opportunities and unresolved issues have left enthusiasts frustrated, raising questions about Mitsubishi’s future in India.
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FAQ
Mitsubishi’s failure in India can be attributed to several factors. Key reasons include dependency on Hindustan Motors (HM) for production and network operations, limited presence, and unfavorable pricing due to the Completely Built-Up (CBU) route for SUVs.
he Mitsubishi Lancer was the only model that performed relatively well in India. Launched in 1998, this luxury compact sedan gained popularity. It featured a 1.5-liter petrol engine and several luxury features. However, it was discontinued in 2012.
The Mitsubishi Cedia faced challenges due to the Indian market’s limited openness to sedans at the time of its launch. Despite being a powerful and feature-rich sedan, it struggled to gain traction and was eventually discontinued in 2013.
The Pajero Sport faced difficulties primarily because it was brought to India via the expensive CBU route. This inflated its prices and contributed to the company’s losses. The SUV’s sales were affected as a result.
The Mitsubishi Outlander was discontinued in 2013 but was relaunched in a new avatar in 2018. Like the Pajero Sport, it was also brought through the CBU route, making it costlier than its rivals.
Mitsubishi faced financial instability, especially after the Japanese Transport Department investigated the company’s false fuel mileage claims. Share prices plummeted, exacerbating the situation.
Mitsubishi was heavily dependent on Hindustan Motors (HM) for production and network management. However, when HM closed its operations, Mitsubishi struggled to regrow independently.
Mitsubishi sold approximately 30 vehicles between April 2019 and January 2020, and 164 vehicles between April 2018 and January 2019. The lack of funding hindered their spare parts import from Japan.
Several automobile manufacturers, including global giants like Harley-Davidson, General Motors, Ford, and UM, faced challenges in India. Factors such as market dynamics, operational costs, and shocks from their exit impacted the industry.
Mitsubishi’s experience highlights the importance of local presence, understanding market preferences, and avoiding costly import routes. Companies entering India must adapt to local conditions and build a robust network to succeed.