Mitsubishi News: Mitsubishi Announces New Strategic Plan, 11 New Models

[William Maley]

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Mitsubishi has unveiled a new three-year strategic plan called 'Drive for Growth'. The Japanese automaker wants to increase unit sales and revenue by 30 percent - about 1.3 million vehicles sold in the case of the former. It also plans on improving profit margins from 0.3 to 6 percent. To pull this off, Mitsubishi will be working on reducing costs in development and manufacturing, along with investing $5.3 billion for new products and revamping key markets.

In terms of products, Mitsubishi is planning on launching 11 new and redesigned models over next three years. For the U.S., this means the Outlander PHEV and upcoming Eclipse Cross. The U.S. will also see Mitsubishi work on improving their dealer network.

"We will re-energize our dealership network. We are reviewing our incentive plans, both to attract new dealers and to encourage existing ones to achieve better sales," said Trevor Mann, COO of Mitsubishi Motors.

The goal is to see a 30 percent increase in sales to 130,000 vehicles by the 2019 fiscal year.

For other markets, this is what Mitsubishi is planning,

• For Southeast Asia (Mitsubishi's largest and most profitable marketplace), a new assembly plant in Indonesia and the launch of Xpander multi-purpose vehicle
• The focus in Japan is revitalizing their mini-car business after the fuel economy manipulation scandal
• China will see an expansion in dealers with the goal to sell 220,000 vehicles by 2019

There will be one thing the U.S. will be missing out from Mitsubishi. It was expected that the tie-up with Nissan that begun last year would provide some help for the U.S. But according to Automotive News, Mitsubishi will be going on its own for this region. There are three reasons for this; antitrust concerns between the two companies, vehicles using common engines and platforms not being ready, and Mitsubishi wanting to build the brand back up on their own strengths.

Source: Mitsubishi Motors, Automotive News (Subscription Required)
Press Release is on Page 2

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MITSUBISHI MOTORS LAUNCHES ‘DRIVE FOR GROWTH’ PLAN TO INCREASE VOLUMES, REVENUES AND PROFITABILITY

• Three-year plan targets more than 30 percent increase in unit sales and revenues
• Operating profit margin to reach 6 percent or more
• Capital expenditure and R&D investment to increase to more than 600 billion yen over the three-year period
• Product renewal to accelerate with launch of six new models including Eclipse Cross SUV
• Market expansion planned in ASEAN, US and China

TOKYO, Japan – Mitsubishi Motors today launched "Drive for Growth," a three-year strategic plan to deliver sustained and profitable growth, targeting an increase of more than 30% in both annual unit sales to 1.3 million vehicles and in revenues to 2.5 trillion yen.

Under the plan, Mitsubishi Motors aims to achieve an operating profit margin of 6% or more by the end of fiscal 2019, up from 0.3% in fiscal 2016. The plan combines a product renewal program with targeted market expansion and operating efficiency improvements.

Osamu Masuko, Mitsubishi Motors chief executive, said: "Drive for Growth is a new roadmap for Mitsubishi Motors. We will rebuild trust in our company as our highest priority, successfully launch new vehicles, and achieve a V-shaped financial recovery. These will be the foundations for our future sustainable growth, which will involve increased capital expenditure and product development spending."

The Drive for Growth plan involves a 60% increase in annual capital expenditure to 137 billion yen in fiscal 2019 – lifting spending as a proportion of sales to 5.5% a year. R&D expenses will rise by 50% to 133 billion yen over the same period. In total, this will amount to more than 600 billion yen in investments. Even with these increases, Mitsubishi Motors will maintain financial discipline and generate positive free cash flow during the period. The company intends to establish a competitive dividend policy comparable to those of other Japanese automotive manufacturers. 

As part of its investment drive, Mitsubishi Motors plans to strengthen its four-wheel drive SUVs and pick-ups, and to launch 11 models including the XPANDER and Eclipse Cross. The product renewal program will coincide with a market expansion drive in the ASEAN region, Oceania, United States, China and Japan.

Mr. Masuko said: "This is an ambitious program to maximize our strengths in growing product segments, especially four-wheel drive, and to pursue growth in markets where our brand has strong potential, particularly the ASEAN region. This growth program will also involve an efficient and disciplined operating structure as we continue to manage costs."

Under Drive for Growth, Mitsubishi Motors is targeting a market share of 10% in ASEAN. Sales activities will be reinforced in the US. The company's presence in China will be strengthened with the introduction of models such as the Outlander and Eclipse Cross. And the company will invest in its sales network and product portfolio to return to profitability in Japan by the end of the plan.

The strategic plan is based on three strategic initiatives:

1. Product renewal: During the period of the plan, Mitsubishi Motors will launch 11 new models, of which six will be entirely new model changes – averaging two each year – while the remainder will be important updates of existing vehicles. By the end of the plan, the company expects its five best-selling global models consisting of SUV, 4WD, and plug-in hybrid electric vehicles (PHEV) to account for 70% of total sales volume. Reflecting the shift to lower emission models, the company also announced that it plans to provide electrified solutions across its core model range including an EV kei car from 2020.
2. Focus on core markets to drive revenue growth: This year's opening of a new assembly plant in Indonesia, and the recent launch of the XPANDER multi-purpose vehicle, will drive the growth of the ASEAN business, the group's largest and most profitable operation. ASEAN volumes are expected to rise from 206,000 units a year to 310,000 units a year in 2019. Mitsubishi Motors will also launch new models to assist the turnaround of its important mini-car business in Japan. In the US, the company will improve its dealership networks, targeting a 30% increase in unit sales to 130,000 units in fiscal 2019. In China, Mitsubishi Motors will double the number of dealerships and more than double sales to 220,000 units in fiscal 2019. 
3. Cost Optimization: Mitsubishi Motors will tightly manage production costs, with a target to reduce monozukuri costs by 1.3% per year, in spite of large investments in R&D. Alongside cost management, the company will benefit from growing synergies from its membership of the Renault-Nissan-Mitsubishi alliance. Mitsubishi Motors is seeking synergies totaling more than 100 billion yen over the course of the plan, with the bulk of these to come from efficiencies in procurement and costs avoided in R&D. 

Mitsubishi Motors will contribute its expertise in PHEV technology, its capabilities in SUVs and pick-ups, and market strengths in the ASEAN region to the wider synergy program of the Alliance, which aims to double annualized synergies to more than 10 billion euros by the end of 2022.

"We are refreshing our product line-up, investing in R&D and targeting core market growth," added Mr. Masuko. "Drive for Growth will enable us to continue the transformation of the company over the next three years."

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[G. David Felt]

Good Luck, they should merge with Mazda.

[smk4565]

They could close the Mitsubishi brand and use the factory to build more Nissans.  That would improve margins.

[regfootball]

we don't have Pontiac but still have Mitsubishi.  Where is the justice in this world.

[Frisky Dingo]

No Evo, no care.

[oldshurst442]

No 3000GT VR4 and no 1st and 2nd generation Eclipse. No care.

[FAPTurbo]

mitsu's design language sucks - it's plasti-tacky and overwrought, like they hired the one pontiac designer with a japanese tattoo and thinning ponytail who owns ecchi novels stickier than the rice he makes every meal.

[oldshurst442]

4 hours ago, FAPTurbo said:

who owns ecchi novels stickier than the rice he makes every meal.

That is totally YUCK on soooo many levels!

[Drew Dowdell]

Mitsubishi could become Datsun for the US.  Fresh new brand to anyone under 40.

[Stew]

Get ready for the Galant Crossover, the diamante 3 row crossover, the Lancer small crossover with an Evo variant.  Okay, maybe not, but I hate they called their crossover Eclipse. 

[Robert Hall]

15 minutes ago, Stew said:

Get ready for the Galant Crossover, the diamante 3 row crossover, the Lancer small crossover with an Evo variant.  Okay, maybe not, but I hate they called their crossover Eclipse. 

Maybe they will do a largish square crossover called Montero. 

[Stew]

6 hours ago, Cubical-aka-Moltar said:

Maybe they will do a largish square crossover called Montero. 

That could work.  Don't they still make the off-road worthy Monteros for other markets?

[Robert Hall]

1 minute ago, Stew said:

That could work.  Don't they still make the off-road worthy Monteros for other markets?

Yes..updated version of the 2006 generation...called Pajero, Shogun or Montero depending on the market.

[G. David Felt]

3 minutes ago, Cubical-aka-Moltar said:

Yes..updated version of the 2006 generation...called Pajero, Shogun or Montero depending on the market.

I liked the TV series ShoGun, would be great to have a bad ass SUV call

Mitsubishi ShoGun

The UK version is pretty cool!

 

[Robert Hall]

Great trim level name--'Barbarian'

[ocnblu]

Anything made by Mitsubishi after the Plymouth Fire Arrow is complete crap.

[ykX]

13 hours ago, ocnblu said:

Anything made by Mitsubishi after the Plymouth Fire Arrow is complete crap.

These were far from crap (unfortunately most of their other product was)

 

Edited October 25, 2017 by ykX

[Stew]

16 hours ago, dfelt said:

I liked the TV series ShoGun, would be great to have a bad ass SUV call

Mitsubishi ShoGun

The UK version is pretty cool!

 

We need this here. 

Mitsu used to be an interesting company with interesting products.  Now they are, who knows what. 

[Robert Hall]

I liked the 3000GT (GTO in Japan), esp. the hardtop convertible version.  Had a buddy with one years ago, rode in it a few times.  Reminded me of a Japanese Trans Am...

[surreal1272]

1 hour ago, ykX said:

These were far from crap (unfortunately most of their other product was)

 

Sorry but both variations of the Montero were pure garbage. 

[ykX]

1 minute ago, surreal1272 said:

Sorry but both variations of the Montero were pure garbage. 

I disagree, they were not.  My friend has Montero Sport, great truck

[surreal1272]

25 minutes ago, ykX said:

I disagree, they were not.  My friend has Montero Sport, great truck

Then your friend was lucky because most of them turned to $h! after 60-80K. Their horrible resale value reflected this.

[ccap41]

What's a Mitsubishi? 

[frogger]

18 minutes ago, ccap41 said:

What's a Mitsubishi? 

I'm a loyal, repeat Mitsubishi buyer.

 

[ocnblu]

I'm not.  Sometimes I buy Bumblebee.