Mitsubishi to exit sedan market; focus on SUVs in India

Written by Roudra Bhattacharya | New Delhi | Updated: Dec 9 2012, 06:35am hrs
Japanese car maker Mitsubishi has decided to become a pure SUV player in India, after putting a hold on previously announced plans to launch the Mirage hatchback and slowly phasing out its sedan range of the Lancer and Cedia. Its SUV range includes the diesel Pajero Sport and Montero, apart from the petrol Outlander.

This is because the company feels that the higher-margin and niche SUV market will be easier to tackle with its limited sales and service network, industry sources said. In contrast, it would need much higher economies of scale to be profitable in the extremely price-sensitive and competitive small car and sedan segments.

The company will focus on SUVs, which constitute our strength, for the next few years. Pajero Sport has been especially accepted very well worldwide. Once we establish a strong foundation through SUVs, we will move on to other segments such as sedans and compact cars, a Hindustan Motors (HM) spokesperson told FE. Kolkata-based HM, a CK Birla Group company, has a technical collaboration with Mitsubishi Motors Corporation since 1998 and a licence to manufacture and market Mitsubishi vehicles.

This is a volte face from March this year, when Mitsubishi officials had said that the company is looking at the feasibility of bringing both the hatchback and sedan versions of the Mirage to India. The Mirage is made in Thailand and was launched in the same country last April.

As for its sedan range, production of the Lancer sedan has been stopped at its Tiruvallur plant (in Tamil Nadu) a few months back, while company sources said the Cedia model will also be phased out soon because of lacklustre volumes. Between April and October, the petrol-only Cedia sold 69 units compared to the other petrol executive sedan, Honda Civics 469 units, and segment leader Toyota Corollas 3,697 units. It had a third sedan on sale, the Lancer Evolution X sports car, of which 12 units were imported and have mostly been sold.

In comparison, the SUV range is doing better. The Pajero Sport and Outlander together sold 998 units between April and October this year, in a segment where Toyotas Fortuner strongly led with 9,202 unit sales. The more expensive Montero sold 15 units in the same period.