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Mitsubishi Motors — news, coverage & facts — IJR

Post-World War history

Immediately following the end of the Second World War, the company returned to manufacturing vehicles. Fuso bus production resumed, while a small three-wheeled cargo vehicle called the Mizushima and a scooter called the Silver Pigeon were also developed. However, the zaibatsu (Japan's family-controlled industrial conglomerates) were ordered to be dismantled by the Allied powers in 1950, and Mitsubishi Heavy Industries was split into three regional companies, each with an involvement in motor-vehicle development: West Japan Heavy-Industries, Central Japan Heavy-Industries, and East Japan Heavy-Industries.

East Japan Heavy-Industries began importing the Henry J, an inexpensive American sedan built by Kaiser Motors, in knockdown kit (CKD) form in 1951, and continued to bring them to Japan for the remainder of the car's three-year production run. The same year, Central Japan Heavy-Industries concluded a similar contract with Willys (now owned by Kaiser) for CKD-assembled Jeep CJ-3Bs. This deal proved more durable, with licensed Mitsubishi Jeeps in production until 1998, 30 years after Willys had replaced the model.

By the beginning of the 1960s, Japan's economy was gearing up; wages were rising and the idea of family motoring was taking off. Central Japan Heavy-Industries, now known as Shin Mitsubishi Heavy-Industries, had already re-established an automotive department in its headquarters in 1953. Now, it was ready to introduce the Mitsubishi 500, a mass-market sedan, to meet the new demand from consumers. It followed this in 1962 with the Minica kei car and the Colt 1000, the first of its Colt line of family cars, in 1963. In 1964, Mitsubishi introduced its largest passenger sedan, the Mitsubishi Debonair as a luxury car primarily for the Japanese market, and was used by senior Mitsubishi executives as a company car.

West Japan Heavy-Industries (now renamed Mitsubishi Shipbuilding and Engineering) and East Japan Heavy-Industries (now Mitsubishi Nihon Heavy-Industries) had also expanded their automotive departments in the 1950s, and the three were reintegrated as Mitsubishi Heavy Industries in 1964. Within three years, its output was over 75,000 vehicles annually. Following the successful introduction of the first Galant in 1969 and similar growth with its commercial-vehicle division, the company decided to create a single operation to focus on the automotive industry. Mitsubishi Motors Corporation (MMC) was formed on 22 April 1970, as a wholly owned subsidiary of MHI under the leadership of Tomio Kubo, a successful engineer from the aircraft division.

The logo of three red diamonds, shared with over 40 other companies within the keiretsu, antedates Mitsubishi Motors itself by almost a century. It was chosen by Iwasaki Yatarō, the founder of Mitsubishi, as it was suggestive of the emblem of the Tosa clan who first employed him, and because his own family crest was three rhombi stacked atop each other. The name Mitsubishi (三菱) consists of two parts – mitsu meaning "three" and hishi (which becomes "bishi" under rendaku) meaning "water caltrop" (also called "water chestnut"), and hence "rhombus", which is reflected in the company's logo.

1980s: U.S. entry

Mitsubishi Motors finally achieved annual production of a million cars in 1980, but by this time, its ally was not so healthy; as part of its battle to avoid bankruptcy, Chrysler was forced to sell its Australian manufacturing division to MMC that year. The new Japanese owners renamed it Mitsubishi Motors Australia Ltd (MMAL).

In 1982, the Mitsubishi brand was introduced to the American market for the first time. The Tredia sedan, and the Cordia and Starion coupés were initially sold through 70 dealers in 22 states, with an allocation of 30,000 vehicles among them. This quota, restricted by mutual agreement between the two countries' governments, had to be included among the 120,000 cars earmarked for Chrysler. A restricting element of Mitsubishi's deal with Chrysler was that Chrysler had the right of first refusal of any Mitsubishi automobiles in the US market until 1990. Toward the end of the 1980s, as MMC initiated a major push to increase its U.S. presence, it aired its first national television advertising campaign and made plans to increase its network to 340 dealers.

Despite the ongoing tensions between Chrysler and Mitsubishi, they agreed to unite in a vehicle manufacturing operation in Normal, Illinois. The 50/50 venture provided a way to circumvent the voluntary import restrictions, while providing a new line of compact and subcompact cars for Chrysler. Diamond-Star Motors (DSM)—from the parent companies' logos: three diamonds (Mitsubishi) and a pentastar (Chrysler)—was incorporated in October 1985, and in April 1986, ground was broken on a 1.9-million-square-foot (177,000 m2) production facility in Normal. In 1987, the company was selling 67,000 cars a year in the U.S., but when the plant was completed in March 1988, it offered an annual capacity of 240,000 vehicles. Initially, three platform-sharing compact 2+2 coupés were released, the Mitsubishi Eclipse, Eagle Talon, and Plymouth Laser, with other models being introduced in subsequent years.

In 1983, Mitsubishi expanded its Middle Eastern distribution network by appointing Al Habtoor Motors LLC as its exclusive authorized dealer in the United Arab Emirates. The agreement established a regional infrastructure of showrooms and service facilities spanning Dubai, Abu Dhabi, and the Northern Emirates. This network assumed responsibility for the sales, domestic distribution, and technical maintenance of the manufacturer's passenger cars, off-road vehicles, and commercial trucks.

In 1986 Mitsubishi reached an agreement with Liuzhou Automotive to assemble its Minicab kei van and truck there, making Mitsubishi the third Japanese manufacturer (after Daihatsu and Suzuki) to begin assembly in China. Before receiving government approval for this project, Mitsubishi had to express contrition over "defective" Mitsubishi trucks imported to China in 1984 and 1985. By 1989, Mitsubishi's worldwide production, including its overseas affiliates, had reached 1.5 million units.

Mitsubishi Motors went public in 1988, ending its status as the only one of Japan's 11 auto manufacturers to be privately held. Mitsubishi Heavy Industries agreed to reduce its share to 25%, retaining its position as largest single stockholder. Chrysler, meanwhile, increased its holding to over 20%. The capital raised by this initial offering enabled Mitsubishi to pay off part of its debts, as well as to expand its investments throughout Southeast Asia, where it was by now operating in the Philippines, Malaysia, and Thailand.

1990s: SUV focus

Hirokazu Nakamura became president of Mitsubishi Motors in 1989, and steered the company in some promising directions, with the advent of the Japanese asset price bubble "market correction" that led to the Lost Decade as a result of the Plaza Accord agreement signed in 1985. Sales of the company's new Pajero were bucking conventional wisdom by becoming popular even in the crowded streets of Japan.

Japanese media rumored in 1992 and 1993 that Mitsubishi Motors intended a hostile acquisition of Honda. While Mitsubishi was riding high off of profitable vehicles such as the Diamante and Pajero, Honda was caught off-guard with the SUV and truck boom, and was losing focus after the illness and later death of its founder. Honda CEO Nobuhiko Kawamoto took drastic steps, though, such as exiting Formula 1 and discontinuing unprofitable vehicles to avert a Mitsubishi takeover, which proved effective.

Although sales of SUVs and light trucks were booming in the U.S., Japan's car manufacturers dismissed the idea that such a trend could occur in their own country. Nakamura, however, increased the budget for SUV product development, and his gamble paid off; Mitsubishi's wide line of four-wheel drive vehicles, from the Mitsubishi Pajero Mini kei car to the Delica Space Gear passenger van, rode the wave of SUV-buying in Japan in the early to mid-1990s, and Mitsubishi saw its overall domestic share rise to 11.6% in 1995.

In 1991, Chrysler sold its equity stake in Diamond-Star Motors to its partner Mitsubishi Motors, and from then on the two companies continued to share components and manufacturing on a contractual basis only. Chrysler decreased its interest in Mitsubishi Motors to less than 3% in 1992, and announced its decision to divest itself of all its remaining shares on the open market in 1993. The two companies then terminated their close alliance, with Mitsubishi Motors no longer supplying parts for engines and transmissions for Chrysler. After this period, the company sought alliances with many other automotive manufacturers in different areas of the world, as described under "other alliances" below, with its most economically significant alliance being with Nissan to develop and manufacture kei cars.

2000s

Mitsubishi Heavy Industries (MHI) participated in a ¥540-billion emergency rescue of Mitsubishi Motors in January 2005, in partnership with Mitsubishi Corporation and Mitsubishi Tokyo Financial Group. As part of the rescue, MHI acquired ¥50 billion of Mitsubishi Motors stock, increasing its ownership stake to 15% and making the automaker an affiliate again. The emergency rescue was carried out 4 years after a product recall scandal in Japan that was triggered by accusations of Mitsubishi Motors trying to systematically hide manufacturing defects to avoid recalls, and marketing problems in the US.

After a starvation of new investment caused by lack of cashflow, the company introduced the award-winning Mitsubishi i kei car in 2006, its first new model in 29 months, while a revised Outlander has been introduced worldwide to compete in the popular XUV market niche. The next generation of its Lancer and Lancer Evolution was launched in 2007 and 2008.

Slow-selling vehicles were eliminated from the U.S. market, purchase projections for the Global Engine Manufacturing Alliance have been scaled back, and 10,000 jobs were shed to cut costs with 3,400 workers at its Australian plant and other loss-making operations still under threat. Meanwhile, in an effort to increase production at its U.S. facility, new export markets for the Eclipse and Galant were being explored in Ukraine, the Middle East, and Russia, where the company's bestselling dealership is located. Mitsubishi Motors has also been active in OEM production of cars for Nissan, and announced a similar partnership with Groupe PSA in July 2005 to manufacture an SUV on its behalf.

Mitsubishi Motors reported its first profitable quarter in four years in the third quarter of 2006, and returned to profitability by the end of the 2006 financial year, and sustained profitability and global sales of 1,524,000 through 2007 and later.

In January 2011, the company announced its next midterm business plan to introduce eight hybrid and battery-powered models by 2015. It aimed to sell its first two plug-in hybrids by fiscal 2012.

In March 2015, Mitsubishi Motors started the construction of a new manufacturing plant in Indonesia under a joint venture with Mitsubishi Corporation (40%) and a local company Krama Yudha Group (9%), with the maximum production capacity of 160,000 vehicles per year.

In July 2015, the Mitsubishi Motors announced that it plans to end production at the Diamond-Star Motors plant in Normal, Illinois, US, as the plant has been operating well below capacity for several years. Operations at the facility ended in May 2016. The plant was sold to Maynards Industries, which sold the site to American electric vehicle startup Rivian in 2017.

Asian economic downturn

The benefits Mitsubishi Motors had seen because of its strong presence in Southeast Asia reversed themselves as a result of the economic crisis in the region, which began in 1991 with the advent of the collapse of the Japanese asset price bubble, referred to in Japan as the beginning of the Lost Decade and continued to 1997. The collapse was partly the result of the Plaza Accord agreement in 1985, which sought to equalize the United States dollar with the Japanese yen and the German mark. In September of that year, the company closed its Thai factory in response to a crash in the country's currency and plummeting consumer demand. The large truck plant, which had produced 8,700 trucks in 1996, was shut down indefinitely. In addition, Mitsubishi Motors had little support from sales in Japan, which slowed considerably throughout 1997, and were affected by that country's own economic uncertainty into 1998.

Other Japanese automakers, such as Toyota and Honda, bolstered their own slipping domestic sales with success in the U.S. However, with a comparatively small percentage of the American market, the turmoil in the Asian economy had a greater effect on Mitsubishi Motors, and the company's 1997 losses were the worst in its history. In addition, it lost both its rank as the third-largest automaker in Japan to Mazda, and market share overseas. Its stock price fell precipitously, prompting the company to cancel its year-end dividend payment.

In November 1997, Mitsubishi Motors hired Katsuhiko Kawasoe to replace Takemune Kimura as company president. Kawasoe unveiled an aggressive restructuring program that aimed to cut costs by ¥350 billion in three years, reduce personnel by 1,400, and return the company to profitability by 1998. While the program had some initial success, the company's sales were still stagnant as the Asian economy continued to sputter. In 1999, Mitsubishi Motors was forced once again to skip dividend payments. Its interest-bearing debt totaled ¥1.7 trillion.

Mitsubishi Motors

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Mitsubishi recalls 67,146 Outlanders over backup camera glitch in U.S., Canada

Mitsubishi Motors

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Mitsubishi recalls 67,146 Outlanders over backup camera glitch in U.S., Canada

Mitsubishi Motors across IJR

Article

Article

History

Post-World War history

1970s: Chrysler partnership

1980s: U.S. entry

1990s: SUV focus

2000s

2016–present: Renault–Nissan–Mitsubishi Alliance membership

Other alliances

1974–1984: Colt and Lonsdale

1975–2003: Hyundai

1985–1991: Samcor

1985–2010: Proton

1991–2012: Volvo Cars

1991–2019: Suzuki

1998–2016: Hindustan

1999–2001: Volvo Trucks

1999–2011: Groupe PSA

2004–2010: Volkswagen

2006–2024: Chinese joint ventures

2010–present: Nissan, Renault–Nissan–Mitsubishi

2024–present: Nissan and Honda alliance

Japan sales channels

Mitsubishi Motors Slogans

Historical troubles

Asian economic downturn

Vehicle defect cover-up

0–0–0

End of Australian production

End of Western European production

End of North American production

Withdrawal from UK market

Withdrawal from Chinese market

Fuel economy scandal

Management

Electric vehicles

Motorsport

Circuit racing

Off-road racing

Partnership with Jackie Chan

Locations

Research, design, and administration

Production facilities

Leadership

Mitsubishi Motors across IJR