TORONTO — Mitsubishi is betting that a new approach to urban retail can help offset rising real estate costs while still allowing the brand to target big-city buyers.
Mitsubishi’s new “urban retail boutique concept,” first unveiled in October, essentially separates the showroom from service areas and parking for inventory. The showrooms are in high-density — and high-rent — areas of a city, while the service and parking lots are found in industrial, less expensive areas a few kilometres away.
“It’s all about flexibility and having a proactive approach,” said Juyu Jeon, CEO of Mitsubishi Motor Sales of Canada Inc.
It’s not exactly a new concept. Other automakers in various markets have experimented with similar ideas, and some dealership groups with locations in big cities have done the same. Still, it’s an important concept for the automaker as it eyes expansion in Canada.
GOAL: 100 STORES
Mitsubishi aimed to have 100 dealerships opened in the country by the end of 2019, up from 95 as of mid-October. That comes as the brand doubles down on its signature crossover offerings, including a redesigned RVR it will launch for the 2020 model year.
Sales for the brand in Canada were up 3.3 per cent from a year earlier to 24,370 units through November. While that makes Mitsubishi one of the smallest automakers in Canada, Jeon said new products and different approaches to retail can help Mitsubishi grow and make 2020 an “extremely exciting” year for it.
Paul Micallef, general manager at Scarborough Mitsubishi in Toronto, said that regardless of what Mitsubishi’s retail strategy is, new product will determine how much market share the brand can gain in Canada. He said products in the pipeline, including a redesigned Outlander that’s expected to share a platform with the Nissan Rogue, would help the brand achieve its goals.
“We are dying for some new models,” Micallef said, adding that new products can help Mitsubishi “get going in being a more dominant force, since I really think they deserve to be. It’s a great brand.”
The new urban retail concept, which will debut in Vancouver with other big-city locations under consideration, would make it less cost prohibitive to open a Mitsubishi store, Jeon said. That will be key for the brand as it looks to expand in Canada.
Having more stores in high-density urban areas would help the brand connect with more potential customers, Jeon said.
“Rather than waiting for customers to come to our dealership, we locate them with this urban boutique,” he said. “I don’t think this is rocket science once you understand today’s customer patterns and customers’ needs and the challenge in the industry.
“This is the formula we came up with that we think will be successful.”
PUSH INTO PROVINCES
The new urban retail concept comes as Mitsubishi Canada also looks to expand in provinces where it has less reach.
Atlantic Canada, with its snowy winters, has been targeted as a particular fit for the utility-heavy brand. In May, Mitsubishi opened two stores in the Maritimes, bringing its number of Atlantic Canada stores to nine.
Although Mitsubishi is looking to expand its footprint, Jeon said, it places the most emphasis on finding high-quality dealers to open stores, as well as working with current dealers to make sure they are compliant with a new dealer image program.
“What we’re concerned with” Jeon said, “is not really quantity but quality.”