MITSUBISHI AGENCIES VIE FOR GALANT: CARMAKER REVIEWS G2 CONTRACT AS SHOPS COMPETE FOR $50 MIL LAUNCH

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Mitsubishi Motor Sales of America will hear final pitches this week from national agency G2 and regional dealer shop Deutsch for the $50 million launch of its redesigned 1999 Galant.

Separately, Mitsubishi notified G2 -- a Huntington Beach, Calif., unit of Grey Advertising -- by letter that it is reviewing its contract with the agency. The move could result in a review of the $76 million national account.

NOT `NOTICE' OF A REVIEW

"We don't consider this notice of an agency review," said Kim Custer, director of public affairs and corporate communications, since the automaker is reviewing contracts with all major suppliers.

But he didn't rule out an agency review either, saying: "That decision has to be made close to the 180 days" when the contract will expire.

Mitsubishi's contract with G2 requires the automaker to give the agency notice of a contract review 180 days in advance; usually, contracts specify 90 days notice.

Deutsch, New York and Santa Monica, Calif., got its foot in the door with Mitsubishi late last year as it vied against Grey/ Zimmerman for $65 million to $80 million in dealer accounts. Grey/Zimmerman, a proposed venture between Grey Advertising, Los Angeles, and Zimmerman & Partners, Fort Lauderdale, Fla., never got off the ground, and Mitsubishi awarded all 41 dealer accounts to Deutsch earlier this year (see "Ad review" on opposite page).

It's not a given that Deutsch would automatically get the assignment if it goes into review, industry executives said.

LAUNCH IS CRITICAL

The August launch of Galant is critical for Mitsubishi.

Pierre Gagnon, exec VP-chief operating officer, told Advertising Age earlier this year the launch would demonstrate the marketer's new brand positioning, which he called "spirited products for spirited people." He also said the G2 tag, "Built for living," would probably be dropped.

Mitsubishi has been struggling; last week, the carmaker restructured its top management in both the U.S. and Japan.

U.S. marketing staff was refashioned last month, including the promotion of Katy Bremer, now VP-marketing, from director of logistics and distribution.

1ST-QUARTER SALES DOWN

U.S. sales slid to 43,692 in the first quarter, down 12.5% from the same period in 1997, according to Automotive News. For calendar 1997, sales rose a slight 1% to 189,163 over 1996. And although profitable in the second half of 1997, the automaker didn't post a full-year profit.

Mitsubishi's U.S. sales and manufacturing arm lost more than $1 billion in the last two years, according to Automotive News.

Mitsubishi spent $76 million in measured media last year, down from $114 million in 1996. The drop mostly came in the fourth quarter, Competitive Media Reporting data show. Spending may return to 1996 levels because of the Galant launch.

Contributing: Laura Petrecca

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