Are Mitsubishi and Volvo on the Way Out?
A new report predicts that Mitsubishi and Volvo are among 10 brands that will disappear from the U.S. marketplace before 2014. “Car sales are growing in the United States, but brands with market shares under half a percent cannot compete with companies that either produce high-luxury models like Mercedes-Benz or multiline giants like General Motors,” says 24/7 Wall St.
The financial news site surmises that Mitsubishi and Volvo will stop selling vehicles in the U.S., much like Suzuki did last year. A number of factors go into the report’s predictions, which include declining sales, losses, rising costs that probably won’t be recovered through higher prices, and a declining market share.
The report notes that Volvo competes with higher-end offerings from companies like General Motors and Toyota, as well as entry-level models from Audi, BMW and Mercedes-Benz. 24/7 Wall St. writes, “With all that competition, consumer demand just is not there for Volvo cars.” Volvo’s sales are down 8 percent this year compared with the first four months of 2012. In contrast, Toyota sales are up 5.4 percent, while Audi and BMW sales have increased 14.2 and 5.7 percent, respectively.
Mitsubishi has also been in a sales slump compared with last year. The Japanese automaker’s sales are down 15 percent compared with the first four months of 2012, which is a larger decline than any other brand sold in the U.S. The report indicates that a small model lineup, as well as poor brand perception and lackluster performance in J.D. Power’s 2013 Vehicle Dependability Study aren’t helping Mitsubishi sales.
Some automotive journalists say that Mitsubishi and Volvo still have a fighting chance. Autoweek writes, “We'd say the jury is out on both automakers right now, but corporate parents Geely and Mitsubishi have deep pockets, so don't be surprised if these two are on the site's list of missed predictions in 2015.”
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