Mitsubishi Emerging Markets Seek Way Out

Mitsubishi Motors's negative response to the recall of light vehicles and the quality of plug-in hybrid vehicles have fallen into a depression. However, in the 2013 annual accounts, Mitsubishi set a record of the highest profit in 10 years, and the sales were very smooth. This is indeed affected by the depreciation of the yen, but Mitsubishi's sales in emerging markets such as Southeast Asia are indeed eye-catching. In addition, the sale of unprofitable factories, the re-preparation of vehicles and other means also played a significant role. The 14-year annual budget is targeted at global sales growth and higher profits. However, Mitsubishi still has many problems such as a low presence in the domestic market and preferential stock processing, and it is not easy to want to “resurrect”.

Dispel consumer unease about quality issues

“In the past, there have been serious recall problems. (We are re-emerging this time) We are very ashamed. We will not shrink back and are determined to invest in reform.”

At the press conference on April 25, Mitsubishi Chairman Yoshiko expressed his determination. This is due to the fact that in December last year, the attitude of handling the recall was negatively affected by the Ministry of Land, Infrastructure, Transport and Tourism of Japan. However, due to the battery problem and the suspension of the Outlander PHEV, etc., problems continue to emerge. How to dispel consumer unease about quality issues will be Mitsubishi's main topic in the future.

However, Mitsubishi Motors' 2013 annual final profit was 37.9 billion yen (about 2.256 billion yen), setting a new record for the last 10 years. The 2014 annual final profit target is positioned at 50 billion yen (about 2.977 billion yuan).

The depreciation of the yen did indeed restore some of the losses, but the main effect was that Mitsubishi's small vehicle Mirage maintained excellent results in emerging countries such as Southeast Asia. Not only that, Mitsubishi also sold a Dutch factory with low efficiency in the 12th year, and suspended the production activities of four North American models such as Golan, which has a poor sales. The results of steady selection and concentration gradually began to show. Yoshiko's chairman also stated that "the company is almost restored."

Geographically, despite the fact that Europe’s annual turnover in 2013 was a deficit, it is expected to be profitable in 14 years. The North American 14-year annual forecast is still a seven-year continuous deficit, but it has improved 16 billion yen (approximately 953 million yuan) from the previous year.

Seeking a way to live in emerging markets

Under such circumstances, Nagashima Takashi, senior partner of the analysis firm Lowland Berger, analyzed that “the future of Mitsubishi lies in emerging markets such as Asia and South America. Mitsubishi’s strong brand power is its charm. Spend more time weaving and strengthening.” Distribution network, can become Mitsubishi's strong."

However, domestic sales in Japan are still severe. The once-popular Mitsubishi SUVs such as Pajero and the light-duty Pajero mini have ceased to exist, and have even been surpassed by Suzuki, which is mainly a light car. The investment in new cars has also continued to fail. "The number of customers managed by Mitsubishi Motors will continue to decrease" (middle level of a large car company).

As a result, domestic sales in FY12 were only 134,000 units, a year-on-year decrease of 11.4%. Sales volume decreased for three consecutive years. Market share also fell from 3.5% in 11 years to 2.8%.

In early June, Mitsubishi will launch a light-duty vehicle jointly developed with Nissan Motor Co., but "the number of shops will be small, and how much of the results will be sold is not transparent" (security analyst). Mitsubishi’s internal turmoil such as “If light-duty vehicles fail, they will even face the reality of having to withdraw from the domestic market”.

In addition, Mitsubishi Motors, which was caught in an operating crisis at the time of the recall problem, received approximately 400 billion yen (23.815 billion yuan) in preferred stock from Mitsubishi, and the disposal of these priority stocks has not yet been resolved. Only by solving these problems as soon as possible did Mitsubishi really grasp the key to the resurrection.