Strengths and weaknesses of Mitsubishi

The current financial state of Mitsubishi Motors Corporation bequeaths a mixed bag.

In 2012, the Japanese car firm reported operating losses of $US287 million in Europe, due to stagnant sales and a rampant debt crisis. In February 2012 Mitsubishi decided to withdraw production in Europe at the end of 2012. However, on October 1 that year, Dutch industrial giant VDL Groep had taken over NedCar from Mitsubishi, retaining all 1,500 employees.

Purely in terms of current sales, Mitsubishi Motors is establishing itself as the UK’s fastest growing brand. The manufacturer has announced a 49.6 per cent increase on year-to-date figures on last year, with the supermini Mirage and Outlander SUV exceeding sales targets.

MMC’s UK arm ended 2013 positively, recording passenger-vehicle sales up by 38.1 per cent on 2012 – solidifying its reputation as the fastest growing main stream brand of 2013.

From a global perspective, the group net profit of MMC rose an astonishing 55.5 per cent to US$479 million during April to September 2013, while unit sales increased four per cent to 499,000 vehicles. MMC stating emerging markets and high minicar sales in Japan accounting for the majority of growth. However, this increase in profit can also be put down to effective cost cutting and the Yen’s weakening compared to the US dollar.

And MMC is set for a record year in 2014, the Japanese car maker predicting net income will soar 84 per cent to US$712.7 million and global sales mooted to be 1.1 million vehicles – up by 13 per cent. (2) and (3)

The Mirage city car has sold over 100,000 examples worldwide to date, while the latest third-generation Outlander has sold in excess of 1,000 units since deliveries started in July 2013. The L200 continues to spearhead the pick-up market, with a 23.4 per cent market share year-to-date.

The car maker expects sales growth to continue with forecasted increases of around 20 per cent per year for the next four years – a combination of new products, increased marketing and growth of the Mitsubishi dealer network.

One weakness of Mitsubishi Motors Corporation is that while transforming their image from reliable, safe cars with a successful motorsport heritage to a technical innovation specialist, they are losing (at a considerable rate) the core followers of its performance division.

As MMC president Osamu Masuko said “Our top-selling vehicles are pick-ups, Pajero, Pajero Sport, then the Outlander. We want to further enhance our strong suit.

“We have produced sports cars in the past, now we have to prioritise. This is a simple strategy of back-to-basics.” (4)

And who can blame him? The most prominent strength of Mitsubishi currently has to be down to the leadership of Osamu Masuko. Under his control ,the man has steered the company to profit in 2006 for the first time since 2002. And he knows precisely how to play the company to its strengths, as is evident by the hugely encouraging financial figures.

Another weakness of the brand is its demand for i-MiEV batteries is far outweighing production. Last year, MMC could produce a maximum of 30,000 plug-in vehicles operating at the highest output. However, the car firm is overcoming this by increasing its research and development budgets to produce these batteries more efficiently and moving the production to a new plant. From April 2014 the company will be able to shift 5,000 batteries per month, accounting for 60,000 annually. (4)

Mitsubishi GC-PHEV concept

The design of Mitsubishi’s concept and future vehicles has come under scrutiny. The BMW X5-rivalling GC-PHEV SUV concept proved controversial at its 2013 Tokyo motor show unveiling. Worrying, when you consider that this will form the basis in the future for a Pajero/Shogun replacement – one of Mitsubishi’s best sellers. (5)

This ill-fated design continued with the AR Concept reveal at the same motor show. MMC has not been known to sculpt achingly beautiful cars, but in the past their biggest sellers weren’t exactly bludgeoned with the ugly stick either. If Mitsubishi Motors Corporation want to sell cars on a vast scale they have to be somewhat pleasing on the eye, at least. (6)

Mitsubishi AR concept

From an engineering perspective, the Japanese car firm has experienced issues with its battery packs in the i-MiEV and Outlander. An i-MiEV lithium-ion battery pack caught fire while on the assembly line in March 2013. The following week at a dealership in Yokohama, the battery pack of an Outlander P-HEV overheated and melted after the car had been fully charged and left for one day. Production of the Outlander P-HEV was halted and then resumed in August 2013 after a change to the production process.

In terms of owner satisfaction and reliability, Mitsubishi need to step up their game. In the 2013 JD Power Survey, in which UK owners rate their vehicles on criteria such as good reliability, performance, running costs, servicing and build quality, Mitsubishi finished a lowly 25th out of 27 manufacturers. The Japanese brand achieved an overall score of 74.5 per cent compared to the industry average of 77.6 per cent. Only Alfa Romeo and Chevrolet scored lower. (7)

Aaron Smith

 

Sources/references:

http://www.newspress.co.uk/ViewPressRelease.aspx?pr=46930 (1)

http://www.globaltimes.cn/content/821065.shtml#.Utf7NmyYZjo (2)

http://www.autonews.com/article/20131029/OEM/131029872/mitsubishi-posts-gains-in-quarterly-first-half-profits#axzz2qZgHGhWH (3)

http://www.autonews.com/article/20131216/OEM02/312169989/mitsubishi-chief-automakers-growth-starts-now# (4)

http://www.autocar.co.uk/car-news/motor-shows/mitsubishi-gc-phev-concept-shown (5)

http://www.autocar.co.uk/car-news/motor-shows/mitsubishi-concept-ar-revealed (6)

http://www.autocar.co.uk/car-news/new-cars/2013-jd-power-customer-satisfaction-survey-full-manufacturer-results (7)

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About aaronsmith788

2013-2014 Coventry MA Automotive Journalism student. Published work in Autocar, New Zealand Autocar, Metropol magazine, Timaru Herald. Hopefully many more to come. I'm a sucker for bang-for-buck cars.

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