Published on July 28th, 2020 | by Subhash Nair0
Mitsubishi Killing off Pajero and Will Exit Europe
It’s no secret that Mitsubishi Motors has sort of fallen from grace in the last decade. Excitement for the brand began to dwindle when the brand began to focus too hard on SUVs and forget about their sedan and sportscar market. As a company, this made sense, but as an automotive brand, this was perhaps not the best option. Now with a new plan under the Renault Nissan Mitsubishi Alliance, Mitsubishi has a couple of major decisions on the horizon.
The most drastic is its exit from the European market. This is part of its “Small but Beautiful” 3-year business plan. Under this plan, Mitsubishi will reduce its fixed costs, build its advantages in plug-in hybrid electric, hybrid electric and four-wheel drive vehicles. Most importantly it will focus its efforts on ASEAN, with other markets like Africa, Oceania and South America. They eventually want to increase their market share of the ASEAN region to more than 11%.
Smaller Japanese car brands have been struggling with Europe. Honda will shut its Swindon plant soon and Suzuki have had minor issues with emissions there. Even Mazda is coming to understand how tough it is to do business there. Under the Alliance plan, it was said that Mitsubishi would lead the brands in ASEAN, with Nissan focusing on the American market and Renault handling Europe. It looks like this is the plan coming to action on Mitsubishi’s end.
Seperately, Nikkei Asian Review reported that Mitsubishi would also be closing their Pajero Manufacturing Plant, which is in Gifu Prefecture. The closure would come within 3 years, and that would spell the end of the Pajero as an export vehicle from Japan. The plant also produces the Delica and Outlander, but these two models are expected to continue to be available, with production moving elsewhere.
More than a year ago, the Pajero Final Edition was released. You can read a little about the history of this legendary SUV here.
MITSUBISHI MOTORS CORPORATION (MMC) today announced its three-year mid-term business plan (from fiscal 2020 to 2022), Small but Beautiful, to concentrate its management resources on its core regions and technologies. This plan focuses on cost rationalization and profitability enhancement to realize solid management foundation aiming at sustainable growth after the plan’s three-year period.
The Small but Beautiful plan is based on structural reforms to significantly reduce fixed costs by production capacity optimization, the regional strategy as well as the product/technology strategies. Under this initiative, MMC will concentrate its management resources on the ASEAN region, where it is competitive. Also, MMC will expand its profitability by further enhancement of its unique, competitive-edge technologies such as PHEV, HEV and 4WD, also by introduction of cutting-edge models leveraging the Alliance partners’ technologies. By integrating those technologies, MMC will launch environmentally friendly models that contribute to developing a society where people, cars, and nature can coexist in harmony.
The main actions of this plan are as follows:
Reducing fixed costs by 20 percent or more compared to FY2019, and concentrating investment on core regions and technologies to enhance profitability
Focusing management resources on ASEAN, and increasing the market share there to more than 11 percent
Developing businesses in Africa, Oceania and South America as the second pillar following ASEAN
Strengthening eco-friendly model lineup such as of PHEV and EV by launching new models by FY2022, and introducing new models including SUV, pickup truck and MPV in ASEAN from FY2022 onwards