If you’re not making at least six million vehicles a year, you can’t compete on the world stage. That’s been the industry theory championed by the likes of Carlos Ghosn at Renault-Nissan and Sergio Marchionne at Fiat-Chrysler, for several years.

So how come the Japanese second division – Mazda, Mitsubishi, Suzuki and Subaru selling between 1m and 2m vehicles a year each – has been doing so well? In theory they should have either been taken over by a larger company or fallen by the wayside.

Yet, in 2014, three of them did remarkably well in Europe. Mitsubishi sales were up 35%, Mazda by 22% and Suzuki by 10% while Subaru, 16.5% owned by Toyota, scored a record year in the US with sales growing 20% year-on-year to top 500,000. Subaru sells more cars a month in the US than in a full year in Europe.

While Mazda, Mitsubishi and Suzuki are predominately retail brands, each has seen its fleet business, mostly user-chooser and small businesses, grow during 2014 with plans in place to increase their presence in fleet markets during 2015.

Weaker Yen, new product

A number of factors have come together to help these companies. A weaker Yen, trading at around 150 to the Euro against 113 two years ago, has certainly helped with pricing and improving specification levels. It has also allowed for more flexibility during negotiations on fleet deals.

More importantly, the extra cash they have has allowed them to advertise more widely, launching television adverts for the first time in some years in the case of Mitsubishi which, after being starved of new product for years, launched the Outlander PHEV described with some justification as a ‘game changer’ during 2014.

Product was also key in Suzuki’s success, with the launch of S-Cross in October 2013 proving to be the catalyst for a profitable entry into the fleet business, with volumes in the UK – Suzuki’s largest market in Europe – doubling. Since S-Cross is built in Hungary, it wasn’t a question of the Euro, Pound or Yen exchange rates helping. The UK importer was reinvesting profit for long-term benefit and television advertising was seen as a key part of that.

Suzuki: Stronger fleet operations

But for a brand that was predominately retail it meant becoming much more fleet savvy by recruiting experienced fleet staff from bigger rivals and working closely with those who influence fleet decisions. The company used

S-Cross for its first ever fleet launch and realised it had to be more open about its used car business if it wanted residuals to improve, taking “the guesswork out of our used values,” as Dale Wyatt, Suzuki GB’s director of sales and marketing, put it rather candidly.

It also meant establishing a fleet-specific model, which included sat nav and reversing aids as standard.

The hard work has paid off with residual values for the new Celerio, on sale across Europe from January, predicted to be 9% higher than the outgoing Alto.

Suzuki will be hoping to repeat the S-Cross experience with the new Vitara SUV crossover, on sale from March, which, the company says, will be the first Suzuki people can buy with their hearts rather than their heads. This new Vitara is already winning plaudits. It is based on the S-Cross and rivals in size the Peugeot 2008, Nissan Juke and Skoda Yeti.

Suzuki in the UK is expecting to grow its fleet business from 3,500 units to around 5,000 in 2015. The big challenge both it and Mitsubishi face is teaching

a dealer network accustomed to years of ignoring business customers to turn on the charm when a potential user-chooser walks into the showroom. Suzuki has solved that dilemma by handling all the fleet administration centrally and supplying the vehicle through a local dealer who gets paid a small commission. Mitsubishi has done it by establishing 12 specialist fleet dealers while each of the company’s 120 dealers has a company car specialist.

Plug-in hybrid incentives

Mitsubishi is supported by cash from Mitsubishi Corporation but the relative weakness of the Yen has freed enough money to allow TV advertising in countries like the UK and Norway where there are cash incentives for buyers of plug-in hybrids. In Germany, where there are no incentives, perhaps because domestic manufacturers are yet to launch their PHEVs, Outlander PHEV sales are non-existent.

“Outlander PHEV has completely changed the franchise,” said Mitsubishi Motors UK managing director, Lance Bradley. “It’s a game-changer that we can price at an acceptable level because of the exchange rate.”

Across Europe, more than half of the 36,000 or so Outlander sales in 2014 were PHEV versions. The Outlander PHEVs success in fleet markets – two-thirds of sales in the UK, for example, are to business customers because of its Benefit-in-Kind tax (BiK) of £660 – is opening the door to fleet deals on other models, said Bradley.

While TV advertising focussed on the Outlander PHEV, the increase it generated in showroom traffic led to increased sales across the range with even the ageing Shogun seeing sales grow 60% in the UK and almost 30% across Europe at some 6,000 units.

Mazda: Significant product launches in 2015

Mazda, part owned by Ford until 2008, is proof that all a struggling car company needs is product, product and more product. Since launching its Skyactiv range of models with the 6 and CX-5 some three years ago, it has returned to profit and opened a new plant in Mexico to provide vehicles for North America and Continental Europe. This year will be its busiest in Europe with five significant product launches including new Mazda2 and the CX-3, a crossover using the 2’s architecture; both are expected to attract strong interest from fleet buyers.

Last year, Mazda returned to TV advertising when it launched the 3, which has overtaken the 2 to become the brand’s best seller in several European markets. While still predominantly a retail brand selling about twice as many cars to private buyers as it does to business customers, the return to profitability has helped it to be choosier about its fleet deals, avoiding “high cost, short cycle fleet in any big numbers,” as one Mazda executive put it.

Mazda had a record year in Europe in 2014 with sales up some 21%. It also had its best year for 20 years in the US where sales grew 7.7% year-on-year to some 306,000 units. It should do just as well this year with key fleet models being launched or refreshed.

Suzuki is helped hugely by its 30-year joint venture with Maruti in India, which contributes some 40% of Suzuki’s profits. Suzuki owns 55% of Maruti and it was able to shrug off overtures by Volkswagen, which at one point held a 20% stake in the Japanese company. With two new models in 2015 it should be able to sustain its growth.

Of the three, Mitsubishi, heavily reliant on domestic sales of the small K-cars which face large tax rises, would seem the most vulnerable in the long-term but it has just recorded a 74% sales increase in the UK and is doing well across the rest of Europe. While similar growth is unlikely in 2015, it could still provide a few surprises.