2005: Mitsubishi flexes muscle in U.S.

By Mike Mazur

Tiger Woods and Vijay Singh seem to have little in common, but they share one thing that golfers likely will find intriguing: an affinity for Mitsubishi Diamana shafts.

The world’s No. 1 and No. 2 both use the shaft in their drivers and 3-woods.

Their endorsement contracts with Nike and Cleveland Golf, respectively, prohibit the shaftmaker – MRC Composite Products USA – from explicitly touting the stars’ usage of Diamana shafts. But tour validation of such magnitude spreads quickly through golf’s grapevine and is rapidly raising the profile of the company, a subsidiary of Mitsubishi Rayon Co. Ltd. – one of the 30 business units comprising Mitsubishi Group, the massive Japanese conglomerate whose popular brands include Mitsubishi Motors and Nikon cameras.

As Mitsubishi makes its first major push into the U.S. golf market, its top executives are confident that the company can make it big. Along with the blessing of the game’s most elite players, Mitsubishi has a proven track record in the Japanese golf market and is uniquely backed by Mitsubishi Rayon Co., which by itself is a $3 billion entity and one of the world’s largest suppliers of carbon fiber – the principal ingredient of graphite shaft manufacturing.

“We think we have the resources to be a competitor for the No. 1 spot among premium shaft suppliers,” says Larry Bischmann, Mitsubishi’s director of graphite shafts for North America.

Indeed, all of Mitsubishi’s golf resources will be needed to overcome several major players in a crowded shaft field. And the steep price of its initial offering – $300 suggested retail for the Diamana – could trigger sticker-shock backlash from all but the most avid and affluent of golfers.

But Mitsubishi officials offer no apologies for their pricing strategy. Rather, they insist price is a reflection of quality and are sending a clear message to American consumers with the Diamana. The goal is to raise brand awareness here to the level back home, where Mitsubishi has sold premium shafts for more than 25 years. Since 2002, Mitsubishi has annually supplied more shafts to Japanese club manufacturers than either Fujikura, Graphite Design, UST or Nippon Shaft, according to company officials who cited data from the Yano Report, which tracks marketshare in Japan.

Though unknown to many golfers, Mitsubishi has been operating quietly in the U.S. market since 2002 as a maker of non-branded shafts for club manufacturers such as TaylorMade.

Since then, its U.S. production has grown exponentially. In 2004, Mitsubishi supplied more than 500,000 shafts to equipment makers, up from 100,000 in 2002. This year, Mitsubishi officials expect to move between “1 million to 2 million” units and say U.S. sales could top $10 million.

Perhaps most important to the growth of Mitsubishi’s U.S. golf business is its ties to parent Mitsubishi Rayon, which produces all the raw materials needed for shaft manufacturing, including monomer, acrylic fiber, carbon fiber and resin.

This is a significant advantage because increased commercial usage of composites, most notably in the airline industry, has created a worldwide shortage and spiked prices for carbon fiber (Golfweek, May 7).

Mitsubishi’s shaft division is only slightly insulated from price inflation, but it gains a competitive advantage because of Mitsubishi Rayon’s “integrated operations,” according to Bischmann. Unlike other shaftmakers, he says, Mitsubishi doesn’t have to shop for raw materials from a third party.

“If all of a sudden we want slightly stronger or slightly lighter material, or some different combination of things, we can make whatever we want,” says Bischmann, who notes that Mitsubishi Rayon’s customer list has even included rival shaftmakers. “We have no issues with material availability. Other companies are competing against the aircraft industry.”

This has proven attractive to many equipment makers, including TaylorMade, Cleveland and Acushnet (Titleist and Cobra), all of whom now offer Mitsubishi shafts in some capacity.

“Mitsubishi held a strong position in our non-branded space before Diamana or the carbon fiber supply challenges began to surface,” says Brad Barnett, chief operations officer at TaylorMade. “Their vertical integration just provides (additional) strength.” TaylorMade is exclusively using Mitsubishi for stock shafts in its tour-preferred “TP” models of the soon-to-be-released r5 dual driver and Rescue dual hybrid.

Mitsubishi also is positioning itself for aftermarket sales growth. By summer’s end, it plans to establish 100 high-end retail distributors and is working on the launch of a hybrid shaft.

David Caplan, business manager at Golfing by Design, a Sanford, N.C.-based custom-fitting boutique, says that Diamana, along with Fujikura’s ZCOM, are the “two hottest-selling shafts right now.” At $350 installed, they’re also among his most expensive.

“The guys who really keep up with golf equipment and look for the best performing stuff know exactly what (Diamana) is all about,” Caplan says.

Much of that hype can be attributed to the Woods and Singh factor.

“We were getting a lot of requests for the shaft Vijay – and Tiger, for that matter – were using, so we added (Diamana) at the beginning of this year,” says Mark Christensen, marketing manager for metalwoods at Cleveland Golf.

Cleveland sells the Diamana as a custom upgrade in its Launcher 460 and Launcher 460 Comp drivers and fairway woods. It charges its retail partners an additional $150 for the shaft, raising the actual retail – or “street” – price of its Launcher Comp, for example, to $529 from $379.

“(That) might be a pretty tough pill for a lot of golfers to swallow, but people are buying it,” Christensen says.

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