Mitsubishi Motors UK’s MD is making a bold claim for a brand which retailed 2,700 passenger vehicles in Q1: he wants to sell 3,000-10,000 units a year of the new Outlander PHEV.
It would be easy to shoot down Lance Bradley’s ambitious target. Easy, as no-one knows how big Britain’s appetite for plug-in hybrids is or will be. Until now, there were just three PHEVs available here: the Volvo V60 D6, the Toyota Prius PHEV and the Porsche Panamera S E-Hybrid. The arrival of the petrol-electric Outlander makes it the UK’s first plug-in hybrid SUV, but if BMW builds a right-hand drive version of its forthcoming X5 e-Drive, that will make two.
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If you’re asking yourself why anyone would want an Outlander that you can recharge, it’s simple: cost of ownership. The on-the-road price is the same as the equivalent diesel, though that’s just for the base variant. Higher trim levels mean the list price rises, but only by GBP 1,000. The entry level GX3h starts at GBP 28,249 after the government’s GBP 5,000 P-iCG (Plug-in Car Grant) is applied. Due to the CO2 average of just 44g/km, there’s no Vehicle Excise Duty to pay, and the BIK rate for company car drivers is five percent, meaning that a 40 percent tax payer will have to shell out just GBP 665 in this tax year. That’s less than some of the smallest cars on the market, or as Lance Bradley notes, “most people spend more than that each year on take away coffee”.
Mitsubishi’s figures show that a business user running a Honda CR-V would pay an extra GBP 11,201 in tax over the typical three-year ownership period, or as much GBP 18,319 including a fuel allowance. Suddenly, Lance Bradley’s claims of just how many new Outlander PHEVs his dealers might sell begin to make potential sense.
It’s one thing to talk up a new product but how is the brand behind this vehicle doing? Not including light commercials, where Mitsubishi is especially strong, in 2013, registrations rose by 38 percent to 9,044, albeit coming off a low base from the prior year. For 2014, Lance Bradley expects a 40 percent rise. As at the end of March, however, things aren’t looking too rosy on the passenger vehicle front at least. The SMMT’s numbers show a 16 percent YoY fall to 2,727 but to be fair to Mitsubishi, we can add in 1,835 light commercials (the L200 is the brand’s best selling vehicle) for the first quarter, which is a gain of 10 percent, though the LCV market is up 16 percent for the same period.
Will things soon start to improve? It seems likely, given that Mitsubishi Motors’ UK’s marketing budget has been given a very welcome cash infusion. “In 2012, marketing spend was six million pounds. In 2014, we’ll lift our total spend to 20 million, which includes new TV advertising and sponsorships,” Bradley adds. The sales goal (cars and LCVs) for this year is 21,000 vehicles, which would be a YoY rise of 6,000 units, rising to 23,000 in 2015.
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By GlobalDataThe company’s dealers are reportedly raring to start selling the new PHEV model, with the first vehicles due to be with customers from May. Unlike the brand’s tiny i-MiEV plug-in, which is available from just 12 retailers, the Outlander PHEV will be sold by every dealer. The network itself totalled 100 in 2012, was expanded by about 10 percent in 2013, and by June, will have reached 120. Bradley thinks that’s the right level, for now, at least.
What of the vehicle itself? The MD believes dealers need to be open in communicating the pros and cons of life with a PHEV. “They need to be upfront with customers. For short journeys you’ll get more than the official 148mpg, but if someone is mainly doing motorway journeys, they’d be better off with a diesel Outlander”. The reason for this is easy to see – after around 106 miles, the real world average fuel consumption advantage drops to around parity with the Outlander diesel, as the ‘free’ electric range runs out after a maximum of 32 miles and the PHEV’s petrol engine kicks in.
Returning to Bradley’s sales forecast, it seems wildly optimistic until you consider the case of The Netherlands. Here is another European market with a tax regime which benefits low or so-called ‘zero’ emissions vehicles, with the local importer also seeing the potential for up to 10,000 Outlander PHEV sales per annum. Plug-ins, hybrids and pure EVs are already popular with the Dutch, and Mitsubishi is a strong brand in The Netherlands, due mostly to it once having a car factory there.
The Okazaki plant near Nagoya which builds the Outlander has had its capacity for the PHEV variant doubled from the original 2,000 units/month. That means it can now build 50,000 a year. Strong sales of the model in Japan, plus better than expected volumes in LHD European markets has meant that the US launch has been delayed until 2015. There have also been bottlenecks in battery production at Lithium Energy Japan (LEJ) and a juggling of battery demand between the Outlander PHEV and the i-MiEV electric car. The home market model has also been subject to a couple of recalls, with the third one announced earlier this month.
Driving the new model for the first time can seem strange, due to the near silence. There is an audible warning which is activated at speeds of up to 22mph but you can’t really hear it from inside the car. The interior is similar to that of the existing Outlander, though the shift lever for the automatic gearbox has an extra ‘B’ slot for increasing the power of engine braking, and the MMCS (dashboard monitor) displays all sorts of information to help you save fuel or show you which axle(s) drive is being sent to.
The powertrain consists of a 2.0-litre four-cylinder petrol engine plus two electric motors – one at the front (60kW & 137Nm) and one at the rear (60kW & 195Nm). Drive can go just to the front wheels via the petrol engine or the front-mounted motor, or to the back axle, which is powered by the rear electric motor. It’s a bit strange to think of an SUV with four-wheel drive but no propshaft – you also have the added benefit of reduced frictional losses. There are two selectable 4WD modes: Normal for ordinary conditions, and Lock for off-roading.
At higher speeds, the car becomes a parallel hybrid. The rear axle is not engaged, so the combustion engine sends power to the front wheels. When you decelerate down a hill, the front and rear motors become generators, pushing electric energy into the batteries. If you’re wondering what all this high tech gear weighs, as I was, you’re in for a pleasant surprise – the PHEV Outlander tips the scales at 1,810kg. I checked the weight of the Outlander diesel and the PHEV does add around 200kg, but for a C segment SUV, 1.8 tonnes isn’t bad. And this one can do a real world 150mpg if your daily journey resembles the UK average of 25 miles (as calculated by the SMMT).
Will this new model make money for Mitsubishi Motors UK, given that the pricing is so competitive? Lance Bradley claims it will, and points out that the base price is virtually the same – GBP 29,000 – as the average passenger vehicle sold in Britain. Which just underlines how the market continues to evolve: for anyone who didn’t notice this fact in last month’s new vehicle registrations, BMW outsold Nissan to become the country’s fifth best selling brand for the year to date, while Audi remains in fourth place, and Mercedes-Benz has climbed to seventh position ahead of Peugeot and Toyota.
If thirty thousand pounds is no longer that much to spend on a new car, and as we know, the CO2 number is a major factor in the buying decision, pricing the new Outlander PHEV at between GBP 28,249 and GBP 34,999 might prove to be bang on the money.
