By on July 23, 2015

2013 Mitsubishi Outlander Sport

Mitsubishi’s plant in Normal, Ill. is set to shut its doors for good. That’s what Japan’s Nikkei news service is reporting today, though U.S. representatives for the company declined to comment.

The plant was opened by Diamond-Star Motors, a joint venture between Mitsubishi and Chrysler, in 1988 after two years of construction. It currently builds the Outlander Sport/RVR, but was tasked with manufacturing the Eclipse/Plymouth Laser/Eagle Talon, Mirage/Eagle Summit, Galant, and coupe versions of the Dodge Avenger, Stratus and Chrysler Sebring during its lifetime.

According to Automotive News, the closure is part of a “strategic shift to the growing Asian market.” Mitsubishi will look for a buyer for the plant, and there’s no shortage of potential companies looking for additional capacity.

After the break up of Diamond-Star Motors, Chrysler’s stake in the plant was purchased by Mitsubishi. At its peak, the Normal facility produced about 200,000 vehicles per year. Last year, the plant produced just short of 70,000 vehicles, still better than the less than 20,000 it produced in 2009.

 

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33 Comments on “Breaking: Mitsubishi Ending U.S. Production, According To Nikkei Report...”


  • avatar
    3800FAN

    Too bad. When you look at Mitsubishi’s lineup in the 90s its sad to see their fall. The eclipse was by far the most wanted car amoung my age-group when I was in high school.

    • 0 avatar
      brn

      Problem was, that was the only thing Mitsubishi had going for them. It wasn’t enough to sustain them long term.

      • 0 avatar
        MLS

        The late 90s Galant was well-regarded, but then it stagnated, and the subsequent generation was far less competitive. I had a soft spot for the Montero Sport, but don’t recall how well it compared with its contemporaries.

  • avatar
    ciscokidinsf

    Pour a 40oz down for the fallen brother…

    This is the slow beginning of the end, can’t imagine the economics for Mitsu to import 100% of their car volume in the US sustainable.

    From the guy who misses his 3000GT (had it 15 years) and lusts for 90’s mitsu’s cars… it’s over. It really is over.

    • 0 avatar
      notferris

      No need to drown your sorrows just yet.
      Mitsubishi ended production in Australia and in Europe and they are now more profitable than ever before in those markets. Furthermore, Mitsubishi has had 16 consecutive months of sales increases and for 22 out of the last 24 months sales were up. Given the plans to update the entire range with the new styling direction, introduced with the 2016 Outlander, and to add two more models, I doubt Mitsubishi is planning to leave. Additionally, if they really want to produce in North America, there’s always the southern U.S. or Mexico…
      Why do I say that? Mitsubishi is the only Japanese brand that operates an UAW staffed facility. I’m not saying that’s bad, but it does add a layer of complexity/cost the other Japanese (and Korean) competitors do not have to deal with. Additionally, about half the Outlander Sport units produced there were exported, mostly to Russia. As you likely know the Russian economy has faltered due to sanctions imposed regarding the Crimea conflict. Add to that the strong dollar, and little indication that the dollar will weaken anytime soon, and you have a problematic financial situation.
      The Outlander Sport is produced in four other locations and could easily be exported to the U.S. at a lower total cost.

      • 0 avatar
        3800FAN

        The only reason its a uaw plant is because it was originally 50% Chrysler owned.

      • 0 avatar
        Pch101

        In Australia, Mitsubishi has a top ten seller in the Triton and is number six among brands.

        In the US, Mitsubishi has nothing in the Top 100 and has virtually no market share. No comparison.

        • 0 avatar
          notferris

          While you are correct in terms of market share and brand strength in Australia, that isn’t the case for Europe. Their share there is less than 1% as well. In both the U.K. and Germany (Europe’s largest car markets) Mitsubishi has grown leaps and bounds over the past two years (and up an averaged 100% so far this year between the two). Selling the plant in the Netherlands has only led to better profits (after the one-time charge).
          Selling off the high-cost Normal plant will lower their operational overhead in the U.S., improving their balance sheet and permit them to be more profitable here as well. At the end of the day that’s what counts, growing profitability.

          • 0 avatar
            Pch101

            The US is a hard place for minor players because car prices are lower. All of the profit margin disappears when you have to cut prices to American levels.

          • 0 avatar
            notferris

            Indeed. Which is why closing the Normal plant makes financial sense.
            Given the strength of the greenback vs. the Thai Baht Mitsubishi actually manages an estimated 3% margin on every Mirage sold in the U.S. (even with the discounts). That’s not the case for Australia and Canada where both currencies are weakening against the Baht.
            As long as the Yen stays low, Mitsubishi could import the Outlander Sport from Japan. However if the trend reverses, they can then ship the car from Indonesia instead and reap greater currency margins that way. Now, I can almost hear you saying that those cars all have to be shipped over thousands of miles of ocean. Believe it or not, Mitsubishi Motors is actually a big player in ro-ro transport.
            Interesting but very long article on MMC’s logistics:
            http://www.automotivelogisticsmagazine.com/interview/welcome-to-the-next-stage-for-mitsubishi

            The short of it is this, ever since the 2008 crash, Mitsubishi has focused on reducing exports from Japan and increasing production in lower cost hubs like Thailand and Indonesia. Using this strategy, Mitsubishi has has been able to become a profitable pure importer in both Europe and Australia. Apparently the U.S. is next.

          • 0 avatar
            Pch101

            They can’t sell enough volume at a high enough price to justify staying in the US for that much longer.

  • avatar
    Chris Tonn

    Normal is less than three hours’ drive from Subaru in Lafayette, Indiana. Hmm.

    • 0 avatar
      3800FAN

      Plant won’t be uaw anymore though.

    • 0 avatar
      Steve Biro

      Yup, Normal is less than three hours from Subaru’s plant in Lafayette, Indiana. And Subie could use the extra capacity. But I wonder if Fuji Heavy’s ultra-conservative management would actually decide to go for it.

    • 0 avatar
      L'avventura

      Very unlikely that Subaru will pick up that plant unless they want to get into a whole messy situation with the UAW. Furthermore, Illinois isn’t a right to work state like Indiana, and very union friendly.

  • avatar
    CoreyDL

    Me, and people like 28 and Bball (a year or more ago): “Mitsubishi will be pulling out of the US market soon, and that’ll be the end of their operations here.”

    Everybody else: “Naw hell naw, that DSM plant in IL will keep them here, they’d never close it, too much trouble. All them Outlanders is popleer wiff people.”

    Now what, you people!?

    • 0 avatar
      RideHeight

      You also heard a lot of “Mitsu’s huge globally and can just troll the USDM, anything they sell here is icing on their cake”.

      What’s interesting is how VW might view this.

    • 0 avatar
      Pch101

      8/4/2012:

      “Suzuki and Mitsubishi aren’t going to fail, but they’ll need to stop selling cars in the US. Whether that will happen by 2014, I don’t know.

      “Maserati won’t be going anywhere, but Lancia will be folded.”

      https://www.thetruthaboutcars.com/2012/08/dead-brand-pool-2014-the-brutal-retreat/#comment-1923070

    • 0 avatar
      JohnTaurus_3.0_AX4N

      Well, your predictions were only half right thus far. Mitsubishi isnt ending US sales, just closing their US plant. Im not saying theyre here to stay, only time will tell on that, but this isnt the end of them in the US…not yet, anyway.

      • 0 avatar
        Pch101

        Without an alliance (and probably even with one), Mitsubishi doesn’t have the economies of scale to compete here. It would need to conquer some other brands, and that seems highly unlikely.

      • 0 avatar
        matador

        I agree with PCH. This may not technically be the end, but it’s likely that they’re winding down.

        I agree that Lancia doesn’t have much of a future, though it looks like Lincoln may.

        • 0 avatar
          Pch101

          I may be proven wrong about Lincoln. Actually, I would be quite happy if I am.

          • 0 avatar
            notferris

            I would argue that you may be proven wrong about Mitsubishi as well.
            The primary drag on their profitability in the U.S. has been the Normal plant.
            This year they are tracking to sell 100,000 units (about 7% of their global total). As long as Mitsubishi can sell cars here with a decent profit margin it does not make sense for them to close shop, especially if they can keep growing as they have been.
            2012 – 57,790
            2013 – 62,227 (up 7.6%)
            2014 – 77,643 (up 24.7%)
            2015 YTD – 49,544 (up 24.9% Jan through Jun)

            Mitsubishi’s fleet sales have been under 10% of total sales since Galant production ended in 2012.

          • 0 avatar
            Pch101

            The main drag on Mitsubishi’s American operations is the complete lack of interest that Americans have in their cars.

            And that lack of interest is unlikely to change.

  • avatar

    Damn. Now what am I going to buy with my 540 FICO, $500 of Amscot money orders down, and my cousin’s ’94 Corsica that I may have to push/pull/drag in?

  • avatar
    danio3834

    ” Last year, the plant produced just short of 70,000 vehicles, still better than the less than 20,000 it produced in 2009.”

    Not surprising they’re shutting it down with that kind of capacity utilization. They can’t afford to run a plant like that and closing it shows their intentions about their future in the US market with mainstream volume models.

    • 0 avatar
      bball40dtw

      And that’s with a factory that has capacity to build 200K+ units a year. That is a horrible capacity utilization rate. Especially when a bunch of other companies are running many factories over 100% of capacity.

    • 0 avatar
      Pch101

      So is this vacant plant going to be of interest to the industry? I would presume that most automakers would prefer to have some kind of customized greenfield construction, but perhaps this would be a good fit for FCA (although given Marchionne’s concerns about capacity utilization, perhaps not.)

      • 0 avatar
        bball40dtw

        I guess the big question is how much would someone get paid to move in?

        • 0 avatar
          Pch101

          I was half-thinking that Marchionne could offer to lease it for a dollar, if Mitsu would buy some batches of rebadged, slightly tweaked FCA vehicles. (Your next Galant could be a 200 with a different nose.)

          (No, I wasn’t actually serious about that. Mostly.)

          • 0 avatar
            bball40dtw

            I heard they were going to use it to build midsized trucks branded Mitsubishi and RAM.

            (turns off all new post notifications)

          • 0 avatar
            Pch101

            I have also heard that the Plymouth Arrow is due for a triumphant comeback.


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