Today, Mitsubishi is widely regarded as a mere shadow of its once innovative self. It’s important to remember that the Mitsubishi Model A was the very first mass-produced car in Japan. The company built a notable motorsports legacy and redefined models like the Colt, Lancer, and Eclipse, making those names iconic. However, that was in the past.
Currently, Mitsubishi’s lineup in the United States includes three versions of the Outlander, two types of Mirage, and the Eclipse Cross— a name that seems out of place for the model. The notion that these cars represent a robust market share is misleading.
To even compete, dealerships are essential. That’s why Mitsubishi maintains over 300 dealers across the country. However, one former dealer is seeking restitution and has filed a lawsuit against Mitsubishi, accusing the automaker of fraud, deceit, and destructive practices.
According to Automotive News, Oakes Auto, a dealership in Kansas City, Missouri, has initiated a multimillion-dollar lawsuit against Mitsubishi Motors North America. The suit alleges that Mitsubishi mistreated its dealers through false promises, unfair vehicle allocations, failure to provide promised financing for required renovations, obstructing a sale of 64 vehicles to an Enterprise rental car affiliate, and hindering a negotiated sale of the dealership. That’s a significant list of claims.
The lawsuit outlines six allegations against the automaker, of which Mitsubishi has moved to dismiss half in federal court. Oakes Auto seeks damages exceeding $6 million, including $2.4 million for breach of fiduciary duty and violation of the Automobile Dealers Day in Court Act, approximately $3.5 million related to a disrupted dealership sale, and around $219,000 for Mitsubishi’s failure to fulfill its post-termination obligations according to the franchise agreement.
Importantly, Oakes Auto was not an underperforming dealership; it was a high-achieving Mitsubishi franchise. In 2021, Mitsubishi set a minimum sales target of 70 new vehicles per location. Oakes Auto surpassed this goal, selling 121 units that year. The dealership continued to rank among the top performers the next year, despite issues with vehicle allocation. By the first quarter of 2023, Oakes Auto maintained a perfect sales and satisfaction index score.
On the other hand, Mitsubishi’s sales figures are on the rise. As of 2023, the company experienced a year-over-year sales increase of 1.8%, indicating a rebound from a disappointing 2022. Even more impressively, the first quarter of 2024 showed a dramatic 35.7% year-over-year rise, hinting at potential growth for its crossover-dominant lineup through new production partnerships and strategic business plans.
Despite these gains, the relationship between Mitsubishi and its dealer took a severe downturn when Oakes Auto received a termination notice in June 2023. The dealer chose not to contest the termination, citing the lawsuit as a reason for not wanting to continue its business relationship with Mitsubishi due to antitrust misconduct. The termination became effective on September 20, 2023. Meanwhile, while waiting for legal proceedings, Oakes Auto is continuing its operations through its Buick-GMC, Ford, and Kia dealerships in Kansas and Missouri.
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