In reaction to the announcement of the freezing of new Mitsubishi product launches in the Old Continent, distributors are wondering about the consequences of discussions with the manufacturer, after a month of August 2020 marked by silence.
In order to carry out these discussions, several partners of the Mitsubishi network have asked Master Bud, having already represented operators during the Chevrolet and Infiniti epics, to defend their interests. "A number of historical dealers have business values directly related to this brand which they have developed over many years. Others, recently arrived – often converting from other brands, notably Infinit – had development plans. All are extremely concerned about the situation. The letter that was sent to them on July 27 did not fail to raise serious questions.", explains Maître Bourgeon in the preamble.
But as of this writing, no additional information has filtered out from MMC or the French subsidiary, even though a meeting between the brand and the partners should take place in September. It is difficult in this context to envisage any action whatsoever.
"First, we'll wait to see what Mitsubishi actually does. The network received a letter, the content of which is not clearly explicit. The manufacturer announces three points: that it renounces the launch of three models initially introduced on the market at the end of the year, that, for 2021, the marketing will be limited to models in accordance with European regulations, and finally that 'Continuity of supply of spare parts on all models will be ensured for 10 years. It is therefore not known whether the brand intends to withdraw definitively from the European market or to put its investments on hold. We need to clarify: is this a temporary renunciation of the development of the range intended for the European market or a final withdrawal?"
Negotiations in sight
Two hypotheses which inevitably call for negotiations with the manufacturer. A temporary reduction in investments can be resolved through a transitional protocol which would allow the concessionaires to be supported during this period. "The non-launch of three SUVs, for example, poses at least the problem of revising the objectives for the 2021 financial year. Also, how to meet demanding standards if the range is reduced to two models instead of a whole range? We will have to see how we can find a contractual and economic balance", continues Maître Bourgeon. In the event of final withdrawal, the challenge will be to find a solution to terminate the relationship."I hope for two parties that this can be negotiated, otherwise it will have to be discussed legally, which does not seem the best way and even the last resort to be employed."And while precedents have already been set, with Chevrolet and Infiniti, no pattern has yet been established, with negotiations depending on how the automaker plans to exit.
"The Chevrolet affair, for example, generated considerable tension. The withdrawal of the mark was accompanied by a notice of termination of contract of two years but this preview was very quickly emptied of its substance after a month, while the manufacturer completely disengaged and had already of stock to import. In the case of Infiniti, discussions on a phased-out protocol were very early on, and reasonable compensation awarded. Not to mention the maintenance of after-sales activity. It all depends on the position of the manufacturer and the licensors. We cannot therefore prejudge the actions to be taken", concludes Maître Bourgeon. To be continued …