MITSUBISHI MOTORS: PROBLEMS, ELECTRIC CARS AND THE DAKAR RALLY

MITSUBISHI MOTORS

null
iMiev electric car
Mitsubishi Motors is Japan's forth largest automaker and is the owner of Fuso trucks. Known for it great engineering but lousy designs, it has 7.8 percent market share in Japan and a 1.8 percent market share in the United States. It is the maker of the i-MiEV, the world's first commercially produced electric car, and is not part of Mitsubishi Heavy Industries or Mitsubishi UFJ Financial Group although it grew from the same conglomerate that was broken up after World War II.

In the late 1990s and early 2000s, Mitsubishi was the only Japanese automaker that couldn’t make a profit. It need bailouts from the government and other Mitsubishi enterprises to stay solvent and repeatedly announced plans to turn the company around. It had several recalls, including a recall of a recall.

Mitsubishi Business

While other Japanese cars companies had great success in the 1990s Mitsubishi crashed. It lost hundreds of millions of dollars, posted a record loss in 2001 and was straddled with almost $14 billion in debt. It returned to profitability in 2002 with a record profit of ¥38 billion but still had large debts.

Mitsubishi’s worldwide sales in 2004 was 1.31 million units, down 214,000 vehicles from the previous year. In Japan sales were down by 40.9 percent to 82,174 units. In the United States fell 37 percent to 161,609 vehicles. Overseas sales account for 80 percent of the car makers business.

By the mid 2000s, Mitsubishi was doing better. It has strong sales in Russia and opened plant there and was planning to build a car factory to make Pajeros in Iran for the Middle East market. In January 2005, Mitsubishi announces it would start making small passenger cars for Nissan and Peugeot. In the April-June 2008 quarter Mitsubishi was back in the black but lost a bundle during the global financial crisis in 2008 and 2009 and was forced to suspend production at it assembly plant in Illinois for almost two months in early 2009<.

Mitsubishi was the worst performing Japanese carmaker in the United States in 2008. It sells between 100,000 and 200,000 vehicles there. The United States is Mitsubishi’s second largest market after Japan.

In October 2010'saying it was driven by increased competition and the cost of the high value of the yen---MMC announced it was going to halt domestic production of small cars in stages, shifting a lot of its manufacturing to a new plant in Thailand starting in 2012. In February 2011, MMC announced it would invest $100 million in its U.S. plant in Normal, Illinois to build Outlander Sport SUVs.

Problems at Mitsubishi

In June 2004, the former president of Mitsubishi was arrested on charges for professional negligence in connection with a fatal crash in October 2002, in which a drive shaft came off, disabling the brake on a truck on a highway in Yamaguchi, causing the truck to pass through an expressway tollgate and ram into a building, killing the 39-year-old driver.

In January 2002, a wheel came off a Mitsubishi truck and rolled down the road, striking and killing a 29-year-old woman and injuring her two sons in Yokohama. In December 2007, Mitsubishi executives were found guilty and given suspended sentence for neglecting to take action that could prevented that crash. The decision was upheld by a higher court in June 2008.

Mitsubishi then suffered a string of defects and cover-ups. It was revealed that an accident involving a dump truck in 1995 was caused by a faulty clutch and Mitsubishi tried to cover up the accident by paying off the company that owned the dump truck.

In 1997, Mitsubishi made a number of changes to improve the opportunities for women and minorities after one the United States's largest sexual harassment suits.

Mitsubishi’s Profits Rise 53 Percent in Fiscal 2011

-Mitsubishi Motors said its net profit for the fiscal year 2011 (April 2011 to March 2012) soared 53.2 per cent, partly driven by cost cutting. , even as its last-quarter results tumbled on a strong yen. AFP reported: “Mitsubishi said it earned 23.9 billion yen (S$365 million) in fiscal 2011, up from 15.6 billion yen in the year-earlier. Operating profit surged 58.1 per cent to 63.7 billion yen as sales slipped to 1.81 trillion yen. [Source: AFP, April 26, 2012]

“In February, Mitsubishi said it would stop manufacturing automobiles in Europe by the end of 2012, blaming a difficult operating environment in the debt-hit continent. But the automaker said it managed a big rise in annual profit mainly because of "improvements in model mix, together with other measures such as reductions in materials and other costs." Mitsubishi also said it recorded a net profit of 10.3 billion yen in the January to March quarter, down 42.0 per cent from 17.8 billion in the same period a year earlier. The company blamed the decline mainly on the strong yen, which hit record highs late last year, making Japanese products more expensive overseas and eroding the value of foreign earnings. [Ibid]

Also, the firm forecasted a higher net profit of 25.0 billion yen on sales of 1.98 trillion yen in the fiscal year through March 2013. Mitsubishi posted a 41.9 percent surge in sales to 79,020 units in the United States in 2011. [Source: Kyodo, January 5, 2012]

Mitsubishi Alliances

In 1999, DaimlerChysler bought 34 percent of Mitsubishi Motors and increased it share of the company to 37 percent, effectively bringing Mitsubishi under DaimlerChysler's control. DaimlerChysler’s Rolf Eckrodt became CEO of Mitsubishi in 2002. He encouraged executives at Mitsubishi to drive Mercedes. He returned the company to profitability by making cuts by was unable to boost sales. In April 2004, DaimlerChrysler stopped providing financial assistance to Mitsubishi. Mitsubishi Fuso is 85 percent owned by Mercedes Benz .

In December 2010, Mitsubishi announced it would start selling Suzuki vans under the Mitsubishi name. The move helps Mitsubishi keep its prices down and remain competitive in the small car market and Suzuki to maintain stability in it domestic factories. The same month, Nissan and MMC formed a joint venture to produce high-quality, affordably-priced minicars as cars produced in India, China and other emerging countries are driving down the prices of cars.

Mitsubishi and Peugeot ended talks for a possible merge or tie up but those talks fell through in early 2010. Mitsubishi want ed same financial support while Peugeot was anxious to gain access to Mitsubishi’s electric car technology.

Mitsubishi Sells off Dutch Plant for “1

In July 2012, Kyodo reported; Mitsubishi said it will sell its vehicle plant in the Netherlands for “1 (about ¥97) to Dutch bus and industrial machine maker VDL Groep BV on condition that it retain the jobs of nearly 1,500 workers there. The automaker apparently deemed it less costly than dismissing all the workers and scrapping the plant. The company estimates it will incur a loss of about ¥28 billion through the selloff. [Source: Kyodo, July 12, 2012]

“The VDL group is planning to manufacture BMW's Mini brand compacts at the plant and is in final talks with the German automaker, sources said. Mitsubishi Motors terminated production at the plant in February, marking the end of its production in the European Union. It had since been looking for a buyer for the plant. [Ibid]

“The plant, a production site for compacts and sport utility vehicles, came online in 1991 as a joint venture of Mitsubishi Motors and Swedish auto giant Volvo and became a wholly owned subsidiary of the Japanese automaker in 2001. Mitsubishi Motors decided to withdraw from the EU as the market deteriorated with the outbreak of the sovereign debt crisis. The company has been shifting its focus toward emerging economies, including Thailand, where sales are brisk. [Ibid]

Mitsubishi Cars

The Mitsubishi Pajero is one of the world’s most popular SUVs and is especially popular among the rich the Middle East and the Third World. It’s forerunner was introduced in the 1940s and was originally developed for the Japanese police. The first Pajero was released in 1982. It was entered Paris-Dakar rally in 1983 and won in 1985 and did it almost every year after, sewing it’s reputation and boosting sales worldwide.

Mitsubishi best sellers in the United States are the Gallant sports sedan and Endeavor sports utility vehicle. The Gallant was including on Consumer Report best buys list in the 1990s. Mitsubishi’s factory in Illinois produces the Gallant Sedan, the Eclipse Spyder, Eclipse sedan and Endeavor SUV.

The Colt was the first car produced by Mitsubishi Daimler Benz. Sales were not as high as had been hoped. Mitsubishi had hoped to rebound after that with the production of the Eclipse coup and Raider pick-up. But didn't have much success with those either.

The Mitsubishi 660-cc “I” minicar was named Car of the Year in 2006 online survey and has won awards of its sleek, egg-shaped design made possible by the car’s unique rear layout platform.

Mitsubishi Electric Car

null
electric car batteries
The Mitsubishi i-MiEV is an electric vehicle developed with Tokyo Electric Power Co. Production began in June 2009 with sales to companies and government agencies at a price of $45,900, more than twice the price of a Prius. The car is expected to be sold to the public in 2010. The electricity costs are about ¥2 per kilometer,

The i-Miev is powered by a 200-kilogram lithium ion battery that can be charge with a household power supply. It can go 130 kilometers per hour and has a range of 160 kilometers. Charging it with a 120-volt charge takes 14 hours, with 200-volt, 4 hours, and 30 minutes with a special charger. Mitsubishi hopes it get the price down to $30,000 with government subsidies. The high cost is largely because of the ion lithium battery.

In April 2010, Mitsubishi began marketing the i-MiEV to individuals for ¥3.98 million. Mitsubishi promised by the “mid 2010s” to the cut the price of the i-Miev to less than $20,000 with the help of government subsidies and tax breaks. Mitsubishi and Tokyo Electric have developed a system for electric cars that allows them to be recharged in four hours with rechargers at home.

In December 2010, Mitsubishi began selling the i-MiEV at electronics stores Yamada Denki and Bic Camera. It also plans to market a device that enables i-MiEV electric cars to supply power to home electric appliances such as rice cookers in emergencies by the end of 2011.

See Electric Cars

At the Tokyo auto show in 2009, Mitsubishi unveiled a hybrid concept (PX-MIEV) and sports utility electric car (i-MiEV Cargo)

At the Global Hybrid Center, Mitsubishi is developing hybrid technology for Mercedes trucks.

Mitsubishi and the Dakar Rally

null
Mitsubishi has done well in Paris-Dakar rally. Mitsubishi has won seven manufacturer titles in a row between 2002 and 2008 and took 12 titles in in its 29 years in the sport.

Mitsubishi won the driver’s tittle at Dakar four consecutive years from 1996 to 1999 and the manufacturer’s title in 1998, with Pajero/Monteris placing 1-2-3 for two years in a row, in 1997 and 1998. Eleven 11 Mitsubishi vehicles finished among the top 20 in 1998. In 2002, Mitsubishis won 9 of the 10 top spots.

In February 2009, Mitsubishi said it would longer compete in the Paris Dakar rally In 2009 defending champion Stephan Peterhandsel and two Mitsubishi team mates pulled out in the first week of the race held in South America as their diesel-powered Lancers were no match for the Volkswagen cars.

In 2005, Mitsubishi announced it would stop participating in world rally competitions until business picked up.

Image Sources: Mitsubishi

Text Sources: New York Times, Washington Post, Los Angeles Times, Daily Yomiuri, Times of London, Japan National Tourist Organization (JNTO), National Geographic, The New Yorker, Time, Newsweek, Reuters, AP, Lonely Planet Guides, Compton’s Encyclopedia and various books and other publications.

Page Top

© 2009 Jeffrey Hays

Last updated October 2012

This site contains copyrighted material the use of which has not always been authorized by the copyright owner. Such material is made available in an effort to advance understanding of country or topic discussed in the article. This constitutes 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. If you are the copyright owner and would like this content removed from factsanddetails.com, please contact me.