February 05, 2008

Horse 853 - RIP the Big Aussie 6

The news over the wireless this afternoon is that Mitsubishi intends to shut down it's South Australia manufacturing facilities. I for one can't say I'm very much surprised by this news at all. Why then did the rot start? I believe that I have the answer.

The Product is Wrong
The 380 was built to replace a car with a dwindling market presence. At the time, it was thought that this was due to the size of the car (which probably was); so rather than look at the trends of where sales were going, Mitsubishi built a car which would attack the then two biggest sellers in the market place.
The problem was that the whammy of rising petrol prices had a triple effect. Firstly the ability of the consumer to buy a bigger car was falling, this in turn caused the overall market for the big car segment to shrink. Thirdly, with the domestic market shrinking, the logical option would be to improve the quality for export which they did. The problem here is that because rising petrol prices are a global phenomenon, the export market also shurnk. The only two places left in the world that would nominally buy a 4L car are the USA (who already build the car and call it a Galant) and Australia... oops.
Holden and Ford are also suffering flagging sales because of rising oil prices. For Dec of 2007 the highest selling car in Australia was not Commodore or Falcon but Corolla. In fact Toyotas total sales of Corolla outsold Commodore, Falcon, 380 and Camry put together.
Quite simply, the 380 was the right car for 1996, but it arrived in 2006 after the world changed.

In fact I accused Holden of making the same mistake back in July of 2006. http://rollo75.blogspot.com/2006/07/horse-593-holdens-big-mistake.html

Also, Ford Motor Company have realised the mistake:

The Marketing is Wrong
Mitsubishi Australia for a great deal of time enjoyed the success and the sales that came with it as a result of the WRC Lancer winning 5 World title with Tommi Makkinen at the helm. With Mitsubishi's WRC program waning and then collapsing in a heap, Mitsubishi Australia applied to AVESCO to become a third manufacturer in the V Supercars.
AVESCO Basically closed ranks. Firstly they wanted to see if such a racecar could be built. Mitsubishi obliged:


If you bear in mind that AVESCO's board then as now was/is made up of representatives from the Teams and the Manufacturers, it makes sense that Ford and Holden would want to keep all other competitors out. This even went before ASIC twice but nothing ever emerged.
It was argued that the Magna and the 380 which followed was a front-wheel-drive car. The regulations were hastily re-written in between the 2003 and 2004 seasons to shut out all competitors who didn't produce a four door car with a V8 option. Despite the fact that the Falcon had replaced its 5L V8 with a 5.4L engine and that Holden likewise had ditched its engine in favour of the 6L LS2 which wasn't even produced in Australia.
To add further insult, the VE Commodore when it came out exceeded the dimensions laid out in the technical manual for the V8 Supercars, and the car has had strips cut from both sides of the car and the roof has been re-profiled. Therefore the VE shares not even a single component with the road car at all - so much for the regulations eh?
What this in effect did was give the 380 no market presence at all. Ford and Holden helped to kill the 380 and with it Mitsubishi's domestic facility, because if nobody know about your product, you sure aint selling it. From a purely commercial viewpoint, to knock out Mitsubishi falls perfectly in line with a company's motives anyway.

It is only a matter of time before Ford shuts down its Falcon plants in Australia by which time it will have tooled up for the Focus. Holden is possibly going to be left with no competitors and that's perhaps fine, but it does suggest that the Big Aussie 6 is dead; today was the first casualty.

Tony Blair's Imaginary Lunch


Do you need an imaginary bib Tony?

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