Mitsubishi Motors is the automobile division of the labyrinthine Mitsubishi keiretsu. Yet despite the Mitsubishi Group's industrial prowess, its car company has always lagged behind domestic rivals. In 2000, it came under the control of what was then DaimlerChrysler, which acquired a controlling stake as part of its expansion into Asia. But in 2004 Mitsubishi Motors was engulfed by a financial crisis after it admitted hiding evidence of vehicle defects. DaimlerChrysler pulled out at that point, handing control back to Mitsubishi Group. A brief recovery was ended by another slump in the wake of the 2008 credit crisis, and then the Japanese earthquake. Mitsubishi subsequently found welcome financial support in manufacturing partnerships with PSA Peugeot Citroen in Russia and with Nissan in Japan, and had regained stability by 2013, before another downturn after the group admitted in 2016 falsifying fuel economy data for the majority of its domestic vehicles. Nissan acquired a controlling 34% stake in the business that year, and it now forms a third leg of the global Renault Nissan alliance. Takao Kato is CEO. The company has refined its focus on its five main models, and the two key markets of the US and China. The company has regained stability after reporting a massive $1.8bn loss for ye 2017 resulting from the fuel scandal. Under its new "Small but Beautiful" strategy, it will scale back its model range to focus on just its most profitable models and key markets, mainly in Asia. Revenues for ye Mar 2020 were approx $20.8bn, but the group was back in the red, as a result of accounting adjustments and tax write-offs. Net loss was approx $237m. Registrations for calendar 2019 were 1,221k vehicles, making Mitsubishi the #21 brand globally. The Outlander SUV accounted for a fifth of volumes, or 253k vehicles. Other important models were the Triton pick-up, ASX (or Outlander Sport) compact SUV and Xpander SUV. In Japan, Mitsubishi sold only 46k cars, less than half any of the top six local manufacturers, and ranking #11 overall. Its biggest market was China at 150k, followed by the US at 121k. First introduced in 1917, Mitsubishi's Model-A automobile was Japan's first series-production passenger car. The portfolio was quickly expanded to include trucks and diesel engines, and later military vehicles, but the group's industrial operations were broken up after WW2. It re-entered the passenger car market in the 1960s. However for almost all its history, the car business was merely another arm of Mitsubishi Heavy Industries. It was established as a separate entity for the first time in 1970.
Capsule checked 30th December 2020
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Adbrands Weekly Update 29th Nov 2018: Mitsubishi Motors followed the lead set by its larger domestic partner Nissan in ousting Renault chief Carlos Ghosn as its chairman. The Mitsubishi board carried the vote unanimously on Monday. In accordance with Japan's draconian legal procedures, Ghosn is still being held in custody in Tokyo, with only occasional access to his lawyers, even though he has yet to be charged with any crime. Also in custody is Nissan director Greg Kelly, accused by prosecutors as being the "mastermind" behind the alleged fraud. Both men have denied any financial misconduct. According to media reports, the $80m or so that Nissan says was undeclared by Ghosn, with Kelly's support, represents deferred salary. As chairman, Ghosn had awarded himself the payments, as he had the right to do, but opted to defer them, in effect as IOUs from the company, until his eventual retirement to avoid any controversy over outsized executive pay awards. It has been suggested by Ghosn's supporters that he did not realise he was required to declare these amounts to fiscal authorities. Several commentators have questioned the extraordinarily aggressive tactics employed by Nissan and by Japanese prosecutors in this case. How could Nissan's own CFO and external auditors not have been aware of the situation? And why have the two foreign-born executives been subjected to far harsher treatment than the Japanese-born perpetrators of even larger accounting frauds at Toshiba and Olympus? As the WSJ commented, "You don't have to be a conspiracy theorist to look at these events and wonder if they are part of a larger effort to end Mr Ghosn's plan to merge Nissan with Renault... Without more transparency, an open account of the allegations, and an opportunity for Messrs Ghosn and Kelly to defend themselves, the Nissan ambush will stand as a black mark on Japanese business." And despite a joint statement from Renault, Nissan and Mitsubishi reiterating their commitment to their alliance, it's hard to see how they will restore friendly relations unless Ghosn is indeed found to committed fraud.
Adbrands Weekly Update 13th Oct 2016: Ads of the Week: "Watermopylaegrad". This insane ad for Mitsubishi trucks from DDB's Brazilian agency Africa is like a wet dream for extreme action fans. How else are you going to demonstrate the advantages of "the most bad-ass truck of all time"? Easy - just throw literally every legendary battle movie scenario you've ever seen at it. Must have been a blast to make. Next time can we take part?
Adbrands Weekly Update 12th May 2016: Nissan is the latest white knight to rescue Mitsubishi Motors from a self-generated crisis. It has agreed to acquire a controlling 34% stake in its countrymate for around $2.2bn. The two businesses already have a manufacturing partnership in Japan. However, the smaller company is struggling to regain domestic trust after it admitted falsifying fuel economy data for at least four of the popular minicars it sells in Japan. In a statement Nissan-Renault CEO Carlos Ghosn said, "Nissan is determined to preserve and nurture the Mitsubishi Motors brand. We will help this company address the challenges it faces, particularly restoring consumer trust in the fuel-economy performance." Mitsubishi Motors suffered a similar crisis in 2004 when it admitted covering up serious faults in some of its cars that had caused fatalities. This led to the termination of an earlier partnership with what was then DaimlerChrysler.
Adbrands Weekly Update 21st April 2016: Mitsubishi Motors admitted it has discovered that engineers deliberately falsified fuel efficiency data on four petrol-powered small cars sold in Japan in order to meet local legal requirements. Mitsubishi Motors shares were suspended after falling by more than 15% as soon as the news was announced. So far, around 600,000 vehicles in Japan are affected, but it's possible that cars sold overseas may also be implicated. If so, the financial impact on the company could be devastating.
Adbrands Weekly Update 1st May 2014: This is looking like the year Japanese exporters finally get back on track, largely as a result of the depreciation of the Japanese Yen against the US Dollar and Euro. Most of the credit goes to Prime Minister Shinzo Abe whose economic policies have reduced the average Yen/Dollar exchange rate for the past year to levels not seen since 2008, boosting the value of export sales considerably. One of the first companies to report the benefits of this was long-struggling Mitsubishi Motors, which reported record profits for the year ending March - the equivalent of more than $1bn in dollar terms - on a 15% surge in revenues to almost $21bn. As a result, the company said it would pay a dividend to shareholders for the first time in 16 years.
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