The numbers are as impressive as the BusinessCar Techie-winning technology for the Mitsubishi Outlander PHEV: in a market of ultra low-emission vehicles that was worth 981 registrations last year, Mitsubishi’s projections for its 2014 sales have gone from an initial 1500 units prior to the launch in April to a current 7500 orders from the UK subsidiary to the factory in Japan.
Mitsubishi Motors UK managing director Lance Bradley predicts it will get to 10,000 by the end of the year. Last year, the company did 2000 diesel variants, while in July, the model accounted for 43% of applications for the Government’s £5000 ULEV grant.
As well as the impressive technology, the Outlander’s success is helped by Mitsubishi being the first manufacturer to, if you count the £5000 Government grant, offer the plug-in car at the same price as the diesel version.
“We wanted to normalise the technology, make it accessible to as many people as possible by making it a version of the existing car and making it the same price,” Bradley tells BusinessCar. “It could change the perception of the brand over a much shorter time than would otherwise be possible. If you get the price wrong and it doesn’t sell, it doesn’t do anything for the brand; but if you get it right, it’s a huge opportunity, and you’ve only got one chance to get it right, so it’s the same price as the diesel.”
The Outlander plug-in hybrid is based on the regular Outlander SUV, and is powered by a combination of 2.0-litre petrol engine and 80hp electric motor that’s capable of taking the car around 32 miles before switching to conventional fuel. The company claims the tipping point where the PHEV is more economical than the diesel lies at around 100 miles on an individual journey.
The battery sits under the seats and adds around 200kg of weight, but has minimal impact on the boot space, which at 463 litres is just 128 litres shy of the diesel version. An official emissions figure of 44g/km puts the Outlander PHEV in the 5% company car BIK band for this tax year, and the official fuel figure is 148mpg.
Uncompromised
“We knew we had a car that’s not compromised – it’s got four-wheel drive, a good boot, five seats, it’s a mainstream car – so we had to keep it as normal as possible, even though it’s extraordinary in what it can do,” says Bradley. “We had to make sure it was at the right price, otherwise we were competing in a market of 981 vehicles. There were discussions with the factory for quite a long time. Their view was that it’s amazing so you can charge more for it, [but] we were determined not to do that.”
That belief in the low pricing point comes from Mitsubishi’s experience with the i-Miev electric city car, which didn’t go down as a resounding success in volume terms.
“There was an expectation that we would sell to people who wanted the new technology and didn’t care that it was too expensive,” explains Bradley. “The absolutely common theme was that ‘the car looks brilliant, [but] how much money will it save me?’ There weren’t people saying ‘it’s brilliant, I want one’.”
He compares that to other technology such as LED TVs, which found homes with early adopters despite prices in the thousands, before rapidly coming down to the point where they were affordable for most people. “That didn’t happen with EVs. People weren’t willing to pay,” says Bradley.
“With the PHEV, we decided we wouldn’t launch it at the wrong price – we knew it was a game-changer and different to others on the market. The Vauxhall Ampera, the Volvo V60 PIH [Plug-In Hybrid] are good products but compromised – for example, having four seats or [not having] a big boot, and what they all had in common was that they were too expensive.”
On the up
The difference in volumes for Mitsubishi is astounding. In 2012 the company registered 11,402 vehicles, last year it was 14,971, and in 2014 Bradley predicts a total of around 25,000, which would mean the 10,000 Outlanders he’s forecasting would be virtually entirely incremental. They would also make the UK the biggest market in the world for PHEV.
“It’s an enormous turnaround and a big change for our dealers as well,” he says. He predicts that around 400 new jobs will be created by the growth, most of which are at dealer level, although the firm has added two new people to its fleet sales department, both recruited from Vauxhall and with experience of dealing with larger fleet customers, taking the department to five. “We’re moving to cope with the demand from business drivers for the PHEV. It’s opening doors,” he says.
Half of the Outlander PHEVs registered will, by the end of the year, be to business car drivers, which is a fairly new area for the firm.
“We’ve never been big in the fleet market. We’ve sold a few [pick-up] L200s, and certainly not in the company car market often dominated by premium German brands,” says Bradley.
The company has also launched a company car driver charter for its dealers and set up training in how to manage company car user-chooser business.
“There’s a lack of experience in our dealerships in how to handle those customers because they have never come to us before,” explains Bradley. “It’s not difficult. They are 90% the same as retail but they may want a different test drive because the way they use the car is different.”
Bradley continues: “We are taking a huge number of customers from German premium brands and they have an experience of what dealer services are like and we need to make sure our service is better than that.” He admits that the firm doesn’t have “big glass showrooms and black leather sofas”, but can focus on customer service, such as making sure the car is ready as promised, and a more personal interaction.
“We like to think of ourselves as the friendly local retailer, not offering the choice you get in big retailers but giving outstanding service and product tailored to what you want,” he declares.
“We have to make sure that company car drivers used to a certain experience get the best of what we can offer.”
With corporate business, larger fleets are a particular weak spot, he says, whether managed in-house or through contract hire companies, with Mitsubishi needing to explain the car and get it on policy lists.
“Some 30% of the fleet market is that kind and one we’ve never had a relationship with before, and that’s the big opportunity,” says Bradley. “We’ve got a good relationship with contract hire companies and Government departments – it’s big companies with their own fleet policies we’re specifically working on now.”
Bradley predicts that there’s “no reason” to think another 10,000 units isn’t possible in 2015.
“The technology can work for a huge number of people and they’re not all in the market this year. The benefits of PHEV, especially with the petrol engine, are widening versus internal combustion engine cars,” he says. “It’s not a one-off flash in the pan – it’s now established as an important part of our range. In the same way as some people want a diesel or petrol, or a manual or auto, some people want a PHEV.
“There’s almost no one that drives a car that couldn’t have an Outlander – it’s five seats, big, comfortable, quick, and has a high seating position for good visibility,” he concludes. “It’s a slightly bold claim but I think it’s changed the industry – it’s difficult for anyone to launch a car like this with a price premium because the question will be ‘why do you do that? Mitsubishi doesn’t’.”
Looking to the future, as the present goes ‘crazy’
The Outlander’s success hasn’t been lost on the rest of the Mitsubishi line-up, with UK boss Lance Bradley telling BusinessCar that everything has “gone crazy”.
“Every one of our products is up – there’s so much attention around the PHEV it’s creating more interest in the other models, and we’re selling more diesel Outlanders than ever before.” He said the firm has been careful to ensure dealers check whether a diesel or plug-in Outlander is more suitable for the customer, depending on mileage.
But the focus has meant increased interest across the range, and from fleets too.
“It’s a case of getting into companies we never have before and selling more L200, Shogun, ASX and Mirage models,” he explains.
And the Outlander plug-in isn’t a one-off. “It is exciting for us. all our cars will have PHEV or electric derivatives,” reveals Bradley. “We’ve got a new car coming every year for the next five years.”
The replacement for the ASX crossover is due two years from now and will have a plug-in derivative.
“You think of how well we’re doing with a mid-sized SUV with the PHEV – what’s it going to be like when you get a C-segment [lower medium] car? The opportunity is so much bigger,” says Bradley. “We’ve already started to establish ourselves with business car drivers and operators. In a couple of years we’ve got a C-segment car.”
Following on will be a new Shogun large off-roader.
“A Shogun with very low emissions suddenly becomes a very desirable business car,” says Bradley. “It’s not just a one-year programme – it’s something incredibly exciting for us in the business car market.
Commercial break
As with the diesel Outlander, there will be a commercial vehicle version of the PHEV, due to be revealed this week.
Although details were scarce as BusinessCar went to press, it is rumoured to be priced at under £30,000 after the £5000 Government ultra low-emissions grant, with first deliveries of the vehicle early next month.
Converted from the passenger variant in the UK, the rear seats are removed and the rear windows covered over to create a load area. Equipment is likely to match the entry GX3h trim of the passenger car.
“It will open up another new market for us, [and is] a very comfortable and efficient commercial vehicle. People who operate in urban areas could have a CV that never uses any petrol – that would be amazing,” said UK boss Lance Bradley.
The regular diesel Outlander 4Work won the 4×4 Van of the Year prize in the 2014 What Van? Awards handed out by BusinessCar’s sister publication.
