By on May 19, 2020

mitsubishi

Mitsubishi Motors’ membership in the great Renault-Nissan alliance won’t protect it from economic realities arising from the coronavirus pandemic. On Tuesday, the automaker announced an 89-percent drop in operating profit for the year ended March, with black ink totaling just $119 million.

Rocked by the virus that’s thrown every automaker’s balance sheet into disarray, Mitsubishi scrapped its planned dividend and held back from issuing a projection for the current year. It’s also thinking small. The virus has changed the global landscape, and Mitsubishi says it will have to change to meet the challenge.

After reporting the company’s poorest results in three years, CEO Takao Kato addressed journalists by teleconference.

“Before the virus we had been mulling which underperforming regions and vehicle segments to cut our exposure to,” he said, as reported by Reuters. “In the wake of the virus, we need to pick up the pace of making these changes. To stay competitive in a post-coronavirus market, we need to immediately shrink our area of focus to regions and segments in which we excel.”

Mitsubishi was already struggling in Asia, China especially. The arrival of the cost-incurring, market-sinking coronavirus occurred at a bad time.

In response to the new reality, Mitsubishi says it will chop its fixed costs by 20 percent or more in the next two years while attempting to bolster its standing in Southeast Asia, from which it draws one-quarter of its sales. Its alliance duties remain, however. The group is expected to announce a going-forward plan in late May, providing details on which members will do what, and where.

What Mitsubishi’s plan means for North America remains to be seen. The automaker said it will offer more details on its near-term strategy at the end of the first fiscal quarter.

[Image: Mitsubishi Motors]

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14 Comments on “The Big Shrink: Mitsubishi Thinks Small After Profit Plunge...”


  • avatar
    DenverMike

    I’ll bet they’ll expedite a pickup for the US/NA market plus a BOF SUV.

  • avatar
    Jeff S

    They need to expedite a compact pickup and price it low and then advertise it. Don’t make another Ridgeline.

    • 0 avatar
      Lorenzo

      Isn’t the chicken tax still in effect? They’d have to build a compact truck in the US or Mexico/Canada to sell it here. Their Normal, IL plant was closed in 2016 and is now run by Rivian.

      • 0 avatar
        DenverMike

        The Sprinter and Transit Connect vans are imports as well as the Tacoma. There’s ways around the Chicken tax that make it irrelevant enough.

  • avatar
    Carrera

    They need to do what Ford did. Bring the global mid sizer they sell everywhere in the world to USA and preferably build it here or Canada. I think it is called the L200.
    The biggest issue is I am not sure they have any gas engines available for it. Only a 2.2l turbo diesel is available which for USA is a non-starter given EPA’s “love” towards anything diesel and the public’s affinity to any diesel vehicle that’s not a super duty pick up.
    Can they use an engine from their Nissan-Renault handlers? Probably but then it will be competition to Nissan Frontier, and the mid-size market isn’t really as big as we think it is.

    • 0 avatar
      Jeff S

      Build it in Mexico at a Nissan plant to make it less expensive. I would like to see a true compact pickup and I would buy one if it came in an extended or regular cab with a decent sized bed.

      • 0 avatar
        Carrera

        Too many issues with the L200 Jeff. Biggest one is not having a gas engine for it. All of them have diesels. Also, Mitsubishi isn’t really flush with cash right now.

    • 0 avatar
      FreedMike

      I don’t think that will work – there are already plenty of choices in the low-cost vehicle market. Besides, if you were in the market for cheap wheels, would you buy from Mitsubishi, which has no market cred, or someone like Hyundai, which does?

  • avatar
    hondaaustin

    Perhaps they could continue to sell the outgoing Frontier as a Mitsubishi. Also, with competition dwindling in the mid-size sedan segment, perhaps the Galant can make a comeback. (No, the mid-size segment is not dead, neither is disco.)

  • avatar
    Jeff S

    I believe it would because it would give Mitsubishi a product that is different than the competitors. There are still lots of choices in crossovers, compact cars, full size pickups, and no shortage of midsize pickups. Have a starting price below 20k and there would be a market for those of us who want a basic small pickup and businesses that want the same. Even if the colors and options were limited to reduce costs.

  • avatar
    Oberkanone

    Canton and Cuernavaca are possible sites for assembly of pickup. I predict Nissan will actually operate as partners for a while and share components and models.
    Pickup from Mitsubishi is what we want, it’s a long-shot. Requires too much effort and resources. Without the chicken tax there would be many more choices in smaller trucks.

  • avatar
    eggsalad

    I dunno, but about 70% of the Mitsubishis I’ve seen around Vegas wear rental-car bar codes. Car rental companies aren’t buying, and that does not bode well.

  • avatar
    Jeff S

    Not a long shot if it were made in Mexico and it could share a platform with one of Nissan’s crossovers and parts with Nissan and Mitsubishi. Lower labor costs, shared platforms, limited exterior and interior color choice, and limited options all to make it more efficient to assemble and to maximize use of just in time parts delivery. No need to be concerned about a chicken tax if the truck is made in North America. It would be easy to re badge a Frontier but the the drive train changes in the 2020 Frontier would take away the cost advantages and the appeal for a product that is different. The 2020 Frontiers have lost their price advantage and the 2021s will definitely be more expensive. Having a compact pickup priced as the lowest priced pickup would definitely expand Mitsubishi’s presence. The Mirage has definitely helped Mitsubishi to grow their market share.

    • 0 avatar
      hondaaustin

      Yes. I think the Mitsu truck could be a rebadged 2019 Frontier… it’s long paid off and still isn’t too bad… put a handsome new grill around the diamonds and people will buy it.

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