Dealer Sues Mitsubishi, Claims It’s ‘Impossible’ To Make Money

We all know today's Mitsubishi is a shadow of its former innovative pioneering self. Lest we forget that the Mitsubishi Model A was the first-ever mass-production car for the Japanese market. Mitsubishi also had a motorsports heritage and redefined the meaning of Colt, Lancer, and Eclipse. Horses, calvaries, and astronomy? Bwahahaha.

But that was then. The design awards, racing podiums, and pure driving joy have evolved right out of Mitsubishi's existence. The current U.S. lineup consists of three variants of the Outlander, two kinds of Mirage, and an Eclipse Cross, which could've and should've been named anything other than Eclipse. To say this is a high-volume, market share-stealing group of cars is an illusion of the highest level.

Nevertheless, you need dealers to even try, which is why Mitsubishi has more than 300 of them across the U.S. But one ex-dealer wants its money back and filed a lawsuit against Mitsubishi, calling the automaker a fraud, a liar, a downright saboteur.

According to Automotive News, Oakes Auto of Kansas City, Missouri, has filed a multimillion-dollar lawsuit against Mitsubishi Motors North America for "mistreating its dealers by making false promises," unfair vehicle allocation practices, failure to provide agreed-upon financing for a required renovation, interfering with a 64-vehicle deal to an Enterprise rental car affiliate, and blocking the negotiated sale of the dealership to a proposed buyer. Whew. That is a lot of accusations.

The suit lists six claims against the automaker, half of which Mitsubishi recently filed a motion in federal court to dismiss. Oakes Auto is asking in excess of $6 million in damages. The complaint lists more than $2.4 million for breach of fiduciary duty and violation of the Automobile Dealers Day in Court Act; roughly $3.5 million for the bungled dealership sale; and about $219,000 for Mitsubishi's failure to follow through on post-termination obligations per its own franchise agreement.

It's worth noting that Oakes Auto was not a deadbeat dealership but instead a top-performing Mitsubishi franchise. In 2021, Mitsubishi established a minimum per-location sales target of 70 new vehicles. Oakes Auto exceeded that figure with 121 units sold. The following year, in spite of its alleged allocation woes, Oakes' sales volume ranked among the top half of the district's dealerships. And through the first quarter of 2023, the Kansas City dealership had a perfect sales and satisfaction index score.

From its side, Mitsubishi sales have been climbing. Its 2023 year-over-year numbers were up 1.8%, a small but positive rebound over a poor showing in 2022. An even better upside is its 2024 first-quarter numbers, which show a 35.7% YOY jump. Its crossover-dominant lineup could also receive some life thanks to production alliances and business plan teasers.

And, yet, this automaker-dealer relationship soured to the point of rotting when Oakes Auto received a termination notice in June 2023. The dealer group didn't challenge the termination and has no intention to because, per the lawsuit, "Oakes Auto no longer wishes to do business with Mitsubishi, given its tortious actions taken in bad faith." Ouch. The dealership termination went into effect on September 20, 2023. While everyone waits for their day in court, Oakes Auto has plenty to keep busy with Buick-GMC, Ford, and Kia dealerships located in Kansas and Missouri.