research methodology of Mitsubishi motors

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CHAPTER 1

INTRODUCTION

1.1 Mitsubishi Group

The Mitsubishi Group (also known as the Mitsubishi Group of Companies or Mitsubishi

Companies ) is a group of autonomous Japanese multinational companies covering a range of

businesses which share the Mitsubishi brand, trademark, and legacy.

The Mitsubishi group of companies forms a loose entity, the Mitsubishi Keiretsu, which is often

referenced in Japanese and US media and official reports; in general these companies all descendfrom the zaibatsu of the same name. The top 25 companies are also members of the Mitsubishi

Kin'ykai , or "Friday Club", and meet monthly. In addition the Mitsubishi.com Committee exists

to facilitate communication and access of the Mitsubishi brand through a portal web site.

History

The Mitsubishi Company was first established as a shipping firm by Yatar Iwasaki (1834

1885) in 1870. In 1873, its name was changed to Mitsubishi Shokai . The name Mitsubishi(consists of two parts: "mitsu" meaning "three" and "hishi" (which becomes "bishi" under

rendaku) meaning "water caltrop" (also called "water chestnut"), and hence "rhombus" , which is

reflected in the company's famous logo. It is also translated as "three diamonds".

Mitsubishi had been established in 1870, two years after the Meiji Restoration, with shipping as

its core business. Its diversification was mostly into related fields. It entered into coal-mining to

gain the coal needed for ships, bought a shipbuilding yard from the government to repair the

ships it used, founded an iron mill to supply iron to the shipbuilding yard, started a marine

insurance business to cater for its shipping business, and so forth. Later, the managerial resources

and technological capabilities acquired through the operation of shipbuilding were utilized to

expand the business further into the manufacture of aircraft and equipment. Similarly, the

experience of overseas shipping led the firm to enter into a trading business.
http://en.wikipedia.org/wiki/Iwasaki_Yatar%C5%8Dhttp://en.wikipedia.org/wiki/Iwasaki_Yatar%C5%8Dhttp://en.wikipedia.org/wiki/Rendakuhttp://en.wikipedia.org/wiki/Water_caltrophttp://en.wikipedia.org/wiki/Rhombushttp://en.wikipedia.org/wiki/Logohttp://en.wikipedia.org/wiki/Meiji_Restorationhttp://en.wikipedia.org/wiki/Marine_insurancehttp://en.wikipedia.org/wiki/Marine_insurancehttp://en.wikipedia.org/wiki/Marine_insurancehttp://en.wikipedia.org/wiki/Marine_insurancehttp://en.wikipedia.org/wiki/Meiji_Restorationhttp://en.wikipedia.org/wiki/Logohttp://en.wikipedia.org/wiki/Rhombushttp://en.wikipedia.org/wiki/Water_caltrophttp://en.wikipedia.org/wiki/Rendakuhttp://en.wikipedia.org/wiki/Iwasaki_Yatar%C5%8D


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The company bought into coal mining in 1881 by acquiring the Takashima mine and Hashima

Island in 1890, using the production to fuel their extensive steamship fleet. They also diversified

into shipbuilding, banking, insurance, warehousing, and trade. Later diversification carried the

organization into such sectors as paper, steel, glass, electrical equipment, aircraft, oil, and real

estate. As Mitsubishi built a broadly based conglomerate, it played a central role in the

modernization of Japanese industry.

The merchant fleet entered into a period of diversification that would eventually result in the

creation of three entities:

Mitsubishi Bank (now a part of the Mitsubishi UFJ Financial Group) was founded in

1919. After its mergers with the Bank of Tokyo in 1996, and UFJ Holdings in 2004, this

became Japan's largest bank.

Mitsubishi Corporation, founded in 1950, Japan's largest general trading company

Mitsubishi Heavy Industries, which includes these industrial companies.

o Mitsubishi Motors, the sixth-largest Japan-based auto manufacturer.

o Mitsubishi Atomic Industry, a nuclear power company.

o Mitsubishi Chemical, the largest Japan-based chemicals company

o Mitsubishi Power Systems, a power generation division

o Nikon Corporation, specializing in optics and imaging.

World War II

During the Second World War, Mitsubishi manufactured aircraft under the direction of Dr. Jiro

Horikoshi. The Mitsubishi A6M ("Zero") was a primary Japanese naval fighter in World War II.

It was used by Imperial Japanese Navy pilots throughout the war, including in kamikaze attacks

during the later stages. Allied pilots were astounded by its maneuverability, and it was very

successful in combat until the Allies devised tactics to utilize their advantage in firepower and

diving speed.

Mitsubishi made use of forced labor during this time period. Laborers included allied POWs, as

well as Chinese and Korean citizens. In the post-war period, lawsuits and demands for
http://en.wikipedia.org/wiki/Coal_mininghttp://en.wikipedia.org/wiki/Hashima_Islandhttp://en.wikipedia.org/wiki/Hashima_Islandhttp://en.wikipedia.org/wiki/Steamshiphttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Paperhttp://en.wikipedia.org/wiki/Steelhttp://en.wikipedia.org/wiki/Glasshttp://en.wikipedia.org/wiki/Aircrafthttp://en.wikipedia.org/wiki/Petroleumhttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Conglomerate_%28company%29http://en.wikipedia.org/wiki/Mitsubishi_Bankhttp://en.wikipedia.org/wiki/Mitsubishi_UFJ_Financial_Grouphttp://en.wikipedia.org/wiki/UFJ_Holdingshttp://en.wikipedia.org/wiki/Mitsubishi_Corporationhttp://en.wikipedia.org/wiki/Mitsubishi_Heavy_Industrieshttp://en.wikipedia.org/wiki/Mitsubishi_Motorshttp://en.wikipedia.org/wiki/Automobilehttp://en.wikipedia.org/wiki/Nuclear_powerhttp://en.wikipedia.org/wiki/Mitsubishi_Chemicalhttp://en.wikipedia.org/wiki/Chemicalhttp://en.wikipedia.org/wiki/Nikonhttp://en.wikipedia.org/wiki/Jiro_Horikoshihttp://en.wikipedia.org/wiki/Jiro_Horikoshihttp://en.wikipedia.org/wiki/Mitsubishi_A6Mhttp://en.wikipedia.org/wiki/World_War_IIhttp://en.wikipedia.org/wiki/Imperial_Japanese_Navyhttp://en.wikipedia.org/wiki/Kamikazehttp://en.wikipedia.org/wiki/Allies_of_World_War_IIhttp://en.wikipedia.org/wiki/Slavery_in_Japan#World_War_IIhttp://en.wikipedia.org/wiki/People%27s_Republic_of_Chinahttp://en.wikipedia.org/wiki/People%27s_Republic_of_Chinahttp://en.wikipedia.org/wiki/Slavery_in_Japan#World_War_IIhttp://en.wikipedia.org/wiki/Allies_of_World_War_IIhttp://en.wikipedia.org/wiki/Kamikazehttp://en.wikipedia.org/wiki/Imperial_Japanese_Navyhttp://en.wikipedia.org/wiki/World_War_IIhttp://en.wikipedia.org/wiki/Mitsubishi_A6Mhttp://en.wikipedia.org/wiki/Jiro_Horikoshihttp://en.wikipedia.org/wiki/Jiro_Horikoshihttp://en.wikipedia.org/wiki/Nikonhttp://en.wikipedia.org/wiki/Chemicalhttp://en.wikipedia.org/wiki/Mitsubishi_Chemicalhttp://en.wikipedia.org/wiki/Nuclear_powerhttp://en.wikipedia.org/wiki/Automobilehttp://en.wikipedia.org/wiki/Mitsubishi_Motorshttp://en.wikipedia.org/wiki/Mitsubishi_Heavy_Industrieshttp://en.wikipedia.org/wiki/Mitsubishi_Corporationhttp://en.wikipedia.org/wiki/UFJ_Holdingshttp://en.wikipedia.org/wiki/Mitsubishi_UFJ_Financial_Grouphttp://en.wikipedia.org/wiki/Mitsubishi_Bankhttp://en.wikipedia.org/wiki/Conglomerate_%28company%29http://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Petroleumhttp://en.wikipedia.org/wiki/Aircrafthttp://en.wikipedia.org/wiki/Glasshttp://en.wikipedia.org/wiki/Steelhttp://en.wikipedia.org/wiki/Paperhttp://en.wikipedia.org/wiki/Insurancehttp://en.wikipedia.org/wiki/Bankhttp://en.wikipedia.org/wiki/Steamshiphttp://en.wikipedia.org/wiki/Hashima_Islandhttp://en.wikipedia.org/wiki/Hashima_Islandhttp://en.wikipedia.org/wiki/Coal_mining


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compensations were presented against the Mitsubishi Corporation, in particular by former

Chinese slave laborers.

Mitsubishi were involved in the opium trade in China during this period.

1945 to present

Mitsubishi participated in Japan's unprecedented economic growth of the 1950s and 1960s. For

example, as Japan modernized its energy and materials industries, the Mitsubishi companies

created Mitsubishi Petrochemical, Mitsubishi Atomic Power Industries, Mitsubishi Liquefied

Petroleum Gas, and Mitsubishi Petroleum Development.

The traditional Mitsubishi emphasis on technological development was in new ventures in suchfields as space development, aviation, ocean development, data communications, computers, and

semiconductors. Mitsubishi companies also were active in consumer goods and services.

In 1970, Mitsubishi companies established the Mitsubishi Foundation to commemorate the

centennial anniversary of the founding of the first Mitsubishi company. The companies also

individually maintain charitable foundations. Mitsubishi pavilions have been highlights of

expositions in Japan since EXPO'70 in Osaka in 1970s to 1980s.

As of 2007, Mitsubishi Corporation, a member of the Mitsubishi Group, is Japan's largest

general trading company (sogo shosha) with over 200 bases of operations in approximately 80

countries worldwide. Together with its over 500 group companies, Mitsubishi employs a

multinational workforce of approximately 54,000 people.

Mitsubishi Motors reached 1.3 million cars of total production in 2007.

In January 2013, Mitsubishi announced it would be launching a takeover bid for the Japanesemeat processor Yonekyu Corp in a deal worth $197 million.

Business sections

Mitsubishi Corporation businesses are divided into seven business sections:
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Business Innovation Group

Industrial Finance, Logistics and Development Group

Energy Business Group

Metals Group

Machinery Group

Chemicals Group

Living Essentials Group

Automobiles

1.2 Mitsubishi motors

Mitsubishi Motors Corporation is a multinational automaker headquartered in Minato, Tokyo,

Japan. In 2010 it was the sixth largest Japanese automaker and the sixteenth largest in the world,

measured by production. It is part of the Mitsubishi keiretsu, formerly the biggest industrial

group in Japan, and was formed in 1970 from the automotive division of Mitsubishi Heavy

Industries

Mitsubishi's automotive origins date back as far as 1917, when the Mitsubishi Shipbuilding Co.,

Ltd. introduced the Model A, Japan's first series-production automobile. An entirely hand-built

seven-seater sedan based on the Fiat Tipo 3, it proved expensive compared to its American and

European mass-produced rivals, and was discontinued in 1921 after only 22 had been built.

In 1934, Mitsubishi Shipbuilding was merged with the Mitsubishi Aircraft Co., a company

established in 1920 to manufacture aircraft engines and other parts. The unified company was

known as Mitsubishi Heavy Industries (MHI), and was the largest private company in Japan.

MHI concentrated on manufacturing aircraft, ships, railroad cars and machinery, but in 1937

developed the PX33, a prototype sedan for military use. It was the first Japanese-built passenger

car with full-time four-wheel drive, a technology the company would return to almost fifty years

later in its quest for motorsport and sales success


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Immediately following the end of the Second World War, the company returned to

manufacturing vehicles. Fuso bus production resumed, while a small three-wheeled cargo

vehicle called the Mizushima and a scooter called the Silver Pigeon were also developed.

However, the zaibatsu (Japan's family-controlled industrial conglomerates) were ordered to be

dismantled by the Allied powers in 1950, and Mitsubishi Heavy Industries was split into three

regional companies, each with an involvement in motor vehicle development: West Japan

Heavy-Industries, Central Japan Heavy-Industries, and East Japan Heavy-Industries.

East Japan Heavy-Industries began importing the Henry J, an inexpensive American sedan built

by Kaiser Motors, in knockdown kit (CKD) form in 1951, and continued to bring them to Japan

for the remainder of the car's three-year production run. The same year, Central Japan Heavy-

Industries concluded a similar contract with Willys (now owned by Kaiser) for CKD-assembledJeep CJ-3Bs. This deal proved more durable, with licensed Mitsubishi Jeeps in production until

1998, thirty years after Willys themselves had replaced the model.

By the beginning of the 1960s Japan's economy was gearing up; wages were rising and the idea

of family motoring was taking off. Central Japan Heavy-Industries, now known as Shin

Mitsubishi Heavy-Industries, had already re-established an automotive department in its

headquarters in 1953. Now it was ready to introduce the Mitsubishi 500, a mass market sedan, to

meet the new demand from consumers. It followed this in 1962 with the Minica kei car and theColt 1000, the first of its Colt line of family cars, in 1963.

West Japan Heavy-Industries (now renamed Mitsubishi Shipbuilding & Engineering) and East

Japan Heavy-Industries (now Mitsubishi Nihon Heavy-Industries) had also expanded their

automotive departments in the 1950s, and the three were re-integrated as Mitsubishi Heavy

Industries in 1964. Within three years its output was over 75,000 vehicles annually. Following

the successful introduction of the first Galant in 1969 and similar growth with its commercial

vehicle division, it was decided that the company should create a single operation to focus on the

automotive industry. Mitsubishi Motors Corporation (MMC) was formed on April 22, 1970 as a

wholly owned subsidiary of MHI under the leadership of Tomio Kubo, a successful engineer

from the aircraft division.
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states, with an allocation of 30,000 vehicles between them. This quota, restricted by mutual

agreement between the two countries' governments, had to be included among the 120,000 cars

earmarked for Chrysler. Toward the end of the 1980s, as MMC initiated a major push to increase

its U.S. presence, it aired its first national television advertising campaign, and made plans to

increase its dealer network to 340 dealers. By 1989, Mitsubishi's worldwide production,

including its overseas affiliates, had reached 1.5 million units.

Despite the ongoing tensions between Chrysler and Mitsubishi, they agreed to unite in a vehicle

manufacturing operation in Normal, Illinois. The 50/50 venture provided a way to circumvent

the voluntary import restrictions, while providing a new line of compact and subcompact cars for

Chrysler. Diamond-Star Motors (DSM) from the parent companies' logos: three diamonds

(Mitsubishi) and a pentastar (Chrysler) was incorporated in October 1985, and in April 1986ground was broken on a 1.9 million square-foot (177,000 m) production facility. In 1987, the

company was selling 67,000 cars a year in the U.S., but when the plant was completed in March

1988 it offered an annual capacity of 240,000 vehicles. Initially, three platform-sharing compact

2+2 coups were released, the Mitsubishi Eclipse, Eagle Talon and Plymouth Laser, with other

models being introduced in subsequent years .

1988 IPO

Mitsubishi Motors went public in 1988, ending its status as the only one of Japan's eleven auto

manufacturers to be privately held. Mitsubishi Heavy Industries agreed to reduce its share to 25

percent, retaining its position as largest single stockholder. Chrysler, meanwhile, increased its

holding to over 20 percent. The capital raised by this initial offering enabled Mitsubishi to pay

off part of its debts, as well as to expand its investments throughout south-east Asia where it was

by now operating in the Philippines, Malaysia, and Thailand.

1990s

Hirokazu Nakamura became president of Mitsubishi in 1989 and steered the company in some

promising directions, with the advent of the Japanese asset price bubble "market correction" that

led to the Lost Decade as a result of the Plaza Accord agreement signed in 1985. Sales of the


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company's new Pajero were bucking conventional wisdom by becoming popular even in the

crowded streets of Japan. Although sales of SUVs and light trucks were booming in the U.S.,

Japan's car manufacturers dismissed the idea that such a trend could occur in their own country.

Nakamura, however, increased the budget for sport utility product development, and his gamble

paid off; Mitsubishi's wide line of four-wheel drive vehicles, from the Mitsubishi Pajero Mini kei

car to the Delica Space Gear passenger van, rode the wave of SUV-buying in Japan in the early

to mid-1990s, and Mitsubishi saw its overall domestic share rise to 11.6 percent in 1995.

Independence

In 1991, Chrysler sold its equity stake in Diamond-Star Motors to its partner, and from then on

they continued to share components and manufacturing on a contractual basis only. Chrysler

decreased its interest in Mitsubishi Motors to less than 3 percent in 1992, and announced its

decision to divest itself of all its remaining shares on the open market in 1993. The two

companies nevertheless continued their close alliance, with Chrysler supplying some parts for

engines and transmissions for DSM, and Mitsubishi marketing Chrysler products overseas and

supplying engines for Chrysler minivans and cars.

DSM was officially renamed Mitsubishi Motor Manufacturing of America on July 1, 1995, and

Mitsubishi Motors North America, Manufacturing Division in 2002.

Electric vehicles

Mitsubishi Motors will start selling its i MiEV, the all-electric mini-car with a lithium-ion battery

pack tucked under its floor, to retail customers in the summer 2009, a year ahead of schedule.

The automaker had initially planned to start leasing the minicar-based vehicle to businesses and

municipalities in the summer 2009 and to wait until 2010 for the retail launch. It has also

announced its plans to offer five other e-drive vehicles.

Mitsubishi Motors aims to cut the price of its electric vehicles to 2 million yen ($21,890) by

fiscal 2012 down 30 percent.
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Motorsport

Mitsubishi has almost half a century of international motorsport experience, predating even the

incorporation of MMC. Beginning with street races in the early 1960s, the company found itself

gravitating towards the challenge of off-road racing. It dominated endurance rallies in the 1970s,

the Dakar Rally from the '80s, and the Group A and Group N classes of the World Rally

Championship through the '90s. Ralliart (later Mitsubishi Motors Motor Sports), was

Mitsubishi's racing subsidiary, although the company ceased competing formally in 2010.

Circuit racing

Mitsubishi's motorsport debut was in touring car racing in 1962, when it entered its Mitsubishi

500 Super DeLuxe in the Macau Grand Prix in an effort to promote sales of its first post-war

passenger car. In an auspicious debut, the diminutive rear-engined sedan swept the top four

places in the "Under 750 cc" category, with Kazuo Togawa taking class honours. The company

returned the following year with their new Colt 600 and again swept the podium with a 1 2 3 in

the "Under 600 cc" class. In its final year of competition with touring cars in 1966, Mitsubishi

scored a podium clean sweep in the "750 1000 cc" class of the 1964 Japanese Grand Prix with

the Colt 1000, their first front-engined competition vehicle.

The company began concentrating on the Japanese GP's emerging open-wheel "formula car"categories from 1966, winning the "Exhibition" class. They also scored class 1 2 in 1967 and

1968, and reached the podium in 1969 and 1970. They finished on a high with an overall 1 2 in

the 1971 Japan GP, with the two litre DOHC F2000 driven by Kuniomi Nagamatsu
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CHAPTER 2

ANALYSIS I

2.1

GLOBAL PRODUCT DEVELOPMENT METHODOLOGY

Along with increased tendency for global sourcing and decreased number of suppliers for

reorganizing supply chain, the auto maker' product development system is going to integrate

globally. Of course, each car maker product development system has special characteristics

because of their product strategy contents. Some companies are trying to do more

centralized and others are looking more localized in respect to their product development

system. But there are common tendencies such as platform integration by each car segment,

elimination of dual R&D efforts, the reduction of R&D cost, the shortening of

development lead time, effective and efficient co-ordination in the R&D activities, and

the strengthening more higher simultaneous product development engineering with design-in

suppliers.

Currently, the U.S. Big Three have gone a step further and are streamlining the types

of platforms they use and cutting their suppliers while reforming product development

processes. The cut back stems from an international point of view and, consequently, are not

concentrated in any specific region. For example, Ford, which boldly publisized its global

strategy under his "Project 2000", has concentrated his product development organization

toward five vehicle centers. It has concentrated development center for luxury car, big size car,

mid-size car, and commercial vehicle, to the Dearborn head-quarters. Small car development isdelegated to the UK. As a result Ford is now going to decrease number of platforms from 24 to

16 after platform integration. And GM is going to cut one third of its 96 platforms. The

company wants to develop its car products on the base of 8 elementary platforms in the future.

Among the mid-size and small car segments it is now going to integrate its platform with Opel.


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Chrysler, which doesn't have overseas development center, wants to decrease its number of

platforms from 12 to 7 or 8.

As a result of advanced three-dimensional computer-aided-design (CAD) techniques,

a variety of car bodies can now be designed using one platform. This integration has eliminated

overlap in new car development, allowing for short cuts in costs. As I noted above, Ford is

developing a new "world car" strategy, where global product teams use a single platform to

design for sale internationally. The plan is revised to increase the number of models per

platform while meeting demand unique to each region.

While the Big Three are employing strategies of international unification and are focusing

on development and purchases, Japanese are engaged in an active shift of production abroad

and have increased their purchase of overseas parts. Generally speaking, Japanese auto-makers

have also tried to eliminate duplication by cutting back on the variety of platforms and

expanding local development systems abroad through restructuring, while simultaneously

strengthening their international purchasing network.

Comparing U.S. with Japan, we see common and contrasting features in each strategic

approach. Both countries are cutting back or decreasing number of platforms and communizing

use to the same platform. Historically Ford and GM's world-wide product development

approach was completely local. Their North American R&D center and European one work

independently each other. Before the early 1970s, the German Opel and Ford, and the British

Ford and Vauxhall developed different cars. Now they are concentrating their R&D power to

unify one organization or to co-ordinate completely, eliminating duplicated jobs in the global

base. Ford and GMs global product development strategy is essentially moving from alocalized to centralized integration approach. Contrasting with GM and Ford, the Japanese auto

maker' approach has generally been one of centralized R&D systems changing to a localized one.

Their essential R&D power is still keeping centralized system in their home country, but year by

year their optional local R&D power has been developing with expending local parts purchasing.

Among Japanese auto makers there are many different approaches in their R&D


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localization.

Alliances with Other companies

Volvo

Mitsubishi participated in a joint venture with rival car-maker Volvo and the Dutch

government at the former DAF plant in Born in 1991. The operation, branded NedCar, began

producing the first generation Mitsubishi Carisma alongside the Volvo S40/V40 in 1996.

The Dutch government sold out to its partners in 1999 and Volvo, by now owned by Ford, sold

its stake to Mitsubishi in early 2001 to leave the Japanese company as the only remaining

shareholder. The factory currently produces the latest Mitsubishi Colt and superminis (partner DaimlerChrysler cancelled production of the Colt-based Smart For four in 2006).Production of

European market-bound Mitsubishi Outlanders, and badge engineered versions of this vehicle,

are also manufactured in the Netherlands.

PSA Peugeot Citron

Mitsubishi has been allied with PSA Peugeot Citron since 1999, after they agreed to co-

operate on the development of diesel engines using the Japanese company's gasoline direct

injection (GDI) technology. They united again in 2005 to develop the Peugeot 4007 and Citron

C-Crosser sport utility vehicles (SUVs), based on the Japanese company's Mitsubishi Outlander.

Two further ties were established between the companies in 2008, first with the establishment of

a jointly owned production facility in Kaluga which will manufacture up to 160,000 Outlander-

based SUVs for the fast-growing Russian market. They are also collaborating in the research anddevelopment of electric powertrains for small urban vehicles. Japanese newspaper Nikkei claims

that Peugeot Citron will sell the electric city car Mitsubishi i MiEV in Europe by 2011.
http://en.wikipedia.org/wiki/NedCarhttp://en.wikipedia.org/wiki/Fordhttp://en.wikipedia.org/wiki/Mitsubishi_Colthttp://en.wikipedia.org/wiki/Supermini_carhttp://en.wikipedia.org/wiki/DaimlerChryslerhttp://en.wikipedia.org/wiki/Smart_Forfourhttp://en.wikipedia.org/wiki/Mitsubishi_Outlanderhttp://en.wikipedia.org/wiki/Badge_engineeringhttp://en.wikipedia.org/wiki/PSA_Peugeot_Citro%C3%ABnhttp://en.wikipedia.org/wiki/Diesel_enginehttp://en.wikipedia.org/wiki/Gasoline_direct_injectionhttp://en.wikipedia.org/wiki/Gasoline_direct_injectionhttp://en.wikipedia.org/wiki/Peugeot_4007http://en.wikipedia.org/wiki/Citro%C3%ABn_C-Crosserhttp://en.wikipedia.org/wiki/Citro%C3%ABn_C-Crosserhttp://en.wikipedia.org/wiki/Sport_utility_vehiclehttp://en.wikipedia.org/wiki/Mitsubishi_Outlanderhttp://en.wikipedia.org/wiki/Kalugahttp://en.wikipedia.org/wiki/Russiahttp://en.wikipedia.org/wiki/Nihon_Keizai_Shimbunhttp://en.wikipedia.org/wiki/Nihon_Keizai_Shimbunhttp://en.wikipedia.org/wiki/Nihon_Keizai_Shimbunhttp://en.wikipedia.org/wiki/Mitsubishi_i_MiEVhttp://en.wikipedia.org/wiki/Mitsubishi_i_MiEVhttp://en.wikipedia.org/wiki/Nihon_Keizai_Shimbunhttp://en.wikipedia.org/wiki/Russiahttp://en.wikipedia.org/wiki/Kalugahttp://en.wikipedia.org/wiki/Mitsubishi_Outlanderhttp://en.wikipedia.org/wiki/Sport_utility_vehiclehttp://en.wikipedia.org/wiki/Citro%C3%ABn_C-Crosserhttp://en.wikipedia.org/wiki/Citro%C3%ABn_C-Crosserhttp://en.wikipedia.org/wiki/Peugeot_4007http://en.wikipedia.org/wiki/Gasoline_direct_injectionhttp://en.wikipedia.org/wiki/Gasoline_direct_injectionhttp://en.wikipedia.org/wiki/Diesel_enginehttp://en.wikipedia.org/wiki/PSA_Peugeot_Citro%C3%ABnhttp://en.wikipedia.org/wiki/Badge_engineeringhttp://en.wikipedia.org/wiki/Mitsubishi_Outlanderhttp://en.wikipedia.org/wiki/Smart_Forfourhttp://en.wikipedia.org/wiki/DaimlerChryslerhttp://en.wikipedia.org/wiki/Supermini_carhttp://en.wikipedia.org/wiki/Mitsubishi_Colthttp://en.wikipedia.org/wiki/Fordhttp://en.wikipedia.org/wiki/NedCar


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Colt & Lonsdale

The Colt name appears frequently in Mitsubishi's history since its introduction as a rear-engined

600cc sedan in the early 1960s. Today, it most commonly refers to the Mitsubishi Colt

subcompact in the company's line-up, but is also the name of MMC's import/distribution

company in the United Kingdom, the Colt Car Company, established in 1974. For the first

decade of its existence, before Far Eastern auto manufacturers had established their reputations,

its cars carried the "Colt" badge in Britain instead of "Mitsubishi".

In 1982 & 1983, Mitsubishi introduced the Australian-built Mitsubishi Sigma to the UK as the

Lonsdale Sigma in an attempt to circumvent British import quotas, but the new brand was

unsuccessful. It then carried Mitsubishi Sigma badges in 1983 84 before abandoning this

operation entirely.

Proton

Proton of Malaysia was initially very dependent on this Japanese company, only assembling their

1985 Proton Saga using MMC components at a newly established facility in Shah Alam.

Subsequent models like the Wira and Perdana were based on the Lancer /Colt and Galant/Eterna

respectively, before the company finally produced an entirely self-developed vehicle with 2001's

Waja, and the 2004's Proton Gen-2. At its peak, the carmaker controlled 75 percent of its

domestic market, even after Mitsubishi ended their 22-year partnership in 2005, selling their 7.9

percent stake for RM3 84 million to Khazanah Nasional Berhad. However, in October 2008,

Proton renewed its technology transfer agreements with MMC, and the Proton Inspira [Proton

Waja replacement] is to be based on the Mitsubishi Lancer platform and official launched on 10

November 2010.

Hyundai
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Hyundai of South Korea, built the Hyundai Pony in 1975 using MMC's Saturn engine and

transmissions. Korea's first car, it remained in production for thirteen years. Mitsubishi held up

to a 10 percent stake in the company, until disposing of the last of its remaining shares in March

2003.

Chinese joint ventures

As of 2006 Mitsubishi has four joint ventures with Chinese partners.

South East (Fujian) Motor Co Ltd

Shenyang Aerospace Mitsubishi Motors Engine Manufacturing Co Ltd Harbin DonganAutomotive Engine Manufacturing Co Ltd - A subsidiary of Harbin Hafei Automobile

Industry Group Co Ltd

Hunan Changfeng Motor Co Ltd - A subsidiary of Chang Feng (Group) Co Ltd

Recent troubles

Asian economic downturn

The benefits Mitsubishi had seen because of its strong presence in south-east Asia reversed

themselves as a result of the economic crisis in the region which began in 1991 with the advent

of the collapse of the Japanese asset price bubble, referred to in Japan as the beginning of the

Lost Decade and continued to 1997. The collapse was partly the result of the Plaza Accord

agreement in 1985, which sought to equalize the United States dollar with the Japanese yen and

the German mark. In September of that year the company closed its Thai factory in response to a

crash in the country's currency and plummeting consumer demand. The large truck plant, which

had produced 8,700 trucks in 1996, was shut down indefinitely. In addition, Mitsubishi had little

support from sales in Japan, which slowed considerably throughout 1997 and were affected by

that country's own economic uncertainty into 1998. Other Japanese automakers, such as Toyota

and Honda, bolstered their own slipping domestic sales with success in the U.S. However, with a

comparatively small percentage of the American market, the impact of the turmoil in the Asian
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economy had a greater effect on Mitsubishi, and the company's 1997 losses were the worst in its

history. In addition, it lost both its rank as the third largest automaker in Japan to Mazda, and

market share overseas. Its stock price fell precipitously, prompting the company to cancel its

year-end dividend payment.

In November 1997, Mitsubishi hired Katsuhiko Kawasoe to replace Takemune Kimura as

company president. Kawasoe unveiled an aggressive restructuring program that aimed to cut

costs by 350 billion in three years, reduce personnel by 1,400, and return the company to

profitability by 1998. But while the program had some initial success, the company's sales were

still stagnant as the Asian economy continued to sputter. In 1999, Mitsubishi was forced once

again to skip dividend payments. Its interest-bearing debt totalled 1.7 trillion.

Vehicle defect cover-up

In what was referred to as "one of the largest corporate scandals in Japanese history",

Mitsubishi was twice forced to admit to systematically covering up defect problems in its

vehicles. Four defects were first publicised in 2000, but in 2004 it confessed to 26 more going

back as far as 1977, including failing brakes, fuel leaks and malfunctioning clutches. The effect

on the company was catastrophic, forcing it to recall 163,707 cars (156,433 in Japan and 7,274

overseas) for free repair further recalls by Fuso truck & bus brought the total number of vehicles

requiring repair to almost one million. The affair led to the resignation and subsequent arrest of

president Kawasoe, along with 23 other employees who were also implicated .[29] Three of them

have since been acquitted, with the judge stating that there was no official request from the

Transport Ministry ordering them to submit a defect report. After the death of Lisa Lopes in

2002, her mother Wanda Lopes sued Mitsubishi Motors because her daughter was driving a

Mitsubishi Montero Sport at the time of the car crash. The car was prone to rollovers, according

to a 2001 Consumer Reports review.

0 0 0
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In an effort to boost sales in the U.S. at the start of the decade, Mitsubishi began offering

a "0 0 0" finance offer 0% down, 0% interest, and $0 monthly payments (all repayments

deferred for 12 months). Initially, sales leapt, but at the end of the year's "grace period"

numerous credit-risky buyers defaulted, leaving Mitsubishi with used vehicles for which they

had received no money and which were now worth less than they cost to manufacture. The

company's American credit operation, MMCA, was eventually forced to make a US$454 million

provision against its 2003 accounts as a result of these losses. As a result, sales plummeted to

243,000 in 2003, 139,000 in 2004, 124,000 in 2005, and 119,000 in 2006.

Australian production

In October 2005, MMAL introduced the Mitsubishi 380 to the Australian market as the

replacement for its long-running Mitsubishi Magna, and the sole vehicle being built at its

Australian assembly plant at Clovelly Park. Despite an investment of A$600 million developing

the car, initial sales projections have so far proven optimistic; after only six months Mitsubishi

scaled back production from 90/day, and reduced the working week from five days to four. It

remained an ongoing concern in the Australian auto industry as to whether this would be

sufficient to restore the plant to profitability and ensure its long term survival.

The drop in local sales could not be mitigated by exports outside of the Australian and New

Zealand market. On February 5, 2008 Mitsubishi Motors Australia announced it would be

closing down its Adelaide assembly plant by the end of March. Between 700 and 1000 direct

jobs would be lost and up to 2000 jobs will be lost in industries supporting Mitsubishi's local

manufacturing operations.

Revitalization plan

The Mitsubishi at the Tokyo Motor Show in 2005.

After a starvation of new investment caused by lack of cashflow, the company introduced the

award-winning Mitsubishi i kei car in 2006, its first new model in 29 months, while a revised
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Outlander has been introduced worldwide to compete in the popular XUV market niche. The

next generation of its Lancer and Lancer Evolution was launched in 2007 and 2008.

Slow selling vehicles were eliminated from the U.S. market, purchase projections for the Global

Engine Manufacturing Alliance have been scaled back, and 10,000 jobs have been shed to cut

costs with 3,400 workers at its Australian plant and other loss-making operations still under

threat. Meanwhile, in an effort to increase production at its U.S. facility, new export markets for

the Eclipse and Galant are being explored in Ukraine, the Middle East, and Russia, where the

company's bestselling dealership is located. Mitsubishi has also been active in OEM production

of cars for Nissan, and announced a similar partnership with PSA Peugeot Citron in July 2005

to manufacture an SUV on their behalf.

Mitsubishi reported its first profitable quarter in four years in the third quarter of 2006, and

returned to profitability by the end of the 2006 financial year, and sustained profitability and

global sales of 1,524,000 through 2007 and later.

In January 2011, the company announced its next mid-term business plan to introduce eight

hybrid and battery-powered models by 2015. It aims to sell its first two plug-in hybrids by fiscal

2012.

End of Europe production

With operating losses 22 billion yen ($287 million) in Europe for the fiscal year to March due to

stagnant sales in a continent beset by uncertainty of a raging debt crisis, finally in February 2012

Mitsubishi have decided to withdraw production in Europe by the end of 2012. On October 1 it

was announced that the Dutch industrial conglomerate VDL Groep had taken over NedCar from

Mitsubishi, retaining all 1,500 employees.

Introductions to New Technology

Electric vehicles
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Off-road racing

Mitsubishi Lancer 1600 GSR.

The East African Safari Rally was by far the most gruelling event on the World RallyChampionship calendar in the 1970s. MMC developed the Lancer 1600 GSR specifically for the

marathon race, and won at the first attempt in 1974. Their highpoint was a clean sweep of the

podium places in 1976 in an event where only 20 percent of the starters typically reached the

finish. They also achieved a 1 2 3 4 in the 1973 Southern Cross Rally, the first of four

consecutive victories in this event with drivers Andrew Cowan and Kenjiro Shinozuka.

Mitsubishi Lancer WRC05.

During the 1980s Mitsubishi continued to participate in the WRC, first with the Lancer EX2000

Turbo and the Starion. It then scored its first outright Group A victories with a Galant VR-4 in

the late '80s, Mitsubishi homologated the Lancer Evolution, and in the hands of Finland' s Tommi

Mkinen, winner of the drivers' title for four consecutive years (1996 1999), they won the

manufacturers' championship in 1998. They have won 34 WRC events since 1973. The Lancer

Evo has also dominated the FIA championship for showroom-ready cars, winning seven

consecutive Group N titles with four different drivers from 1995 2001. Even in 2002 when it

ostensibly lost the title, the class-winning manufacturer was Proton using a Lancer Evo-based

Pert.

Mitsubishi is also the most successful manufacturer in the history of the Dakar Rally, one of the

most challenging and dangerous motorsport events in the world. MMC's maiden entry was in

1983 with their new Pajero, and it took only three attempts to find a winning formula. Since then,

they have won in 1992, '93, '97, '98, and '01 '07, an unprecedented seven consecutive victoriesand twelfth overall with nine different drivers.

Partnership with Jackie Chan
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Mitsubishi has had a 30 year long association with actor Jackie Chan, who has used their

vehicles almost exclusively in his movies throughout his career. The Jackie Chan Cup, first held

in 1984, is an annual celebrity auto race involving international motor journalists and starlets

from across Asia in Mitsubishis with professional Touring Car drivers alongside for assistance,

and was held before the Macau GP until 2004 when it moved to Shanghai. In September 2005

Ralliart, Mitsubishi's motorsport arm, produced 50 Jackie Chan Special Edition versions of the

Lancer Evo IX; Chan acts as the honorary Director of Team Ralliart China

The Main Plants and Their Working Methodology

Mitsubishi Motors'( M.M.C. ) global strategy consists of three parts mainly. One of the

major parts is North America, second major part is Asia, and third one is EU. If we want to

understand its global strategy contents, we should summarize Mitsubishi Motors historical

background and business contents.

Historically M.M.C. Had higher engineering capability in its engine technology and

production technology. Its shortage was in marketing area especially to its domestic market.Therefore, this company has pursued many strategic alliances and business group support. Most

eminent case were the collaboration with Chrysler and Mitsubishi group especially Mitsubishi

Shoji (Trading Company) fully support . This company is now producing fully covered cars and

truck segments, from minicar to 3. 5 liter passenger car and from mini truck to heavy duty truck.

The company is now producing 1, 28 million cars and trucks (1996). It also produced about 9

hundred thousands cars and trucks overseas. And it sold 8.2 hundred thousands cars and trucks

in domestic market and exported 4.6 hundred thousands cars and trucks. In general Mitsubishi's

most important key issue in its global strategy is the reconstruction of North American transplant

MMMA (Mitsubishi Motor Manufacturing of America). This plant originally was established as

the joint venture business with Chrysler in 1985 so called Diamond Stars (DSM). This plant

started car production in 1988
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This plant at first produced small car Mirage for Mitsubishi channel and Eclipse

for Chrysler channel. In 1991 Chrysler wanted to sell its stock ownership of the plant to

Mitsubishi because of its cash flow shortage. Then Mitsubishi bought it and DSM changed itscompany name as MMMA with 100% owned by Mitsubishi. Still now MMMA is producing and

supplying 50% Chrysler brand cars by OEM. And MMMA and Chrysler are still continuing

collaboration relationship in parts and components procurement area. This plant' annual

production capacity was 1 hundred thousand in early stage and now expanded 2.4 hundred

thousand. The plant installed 470 robots in its body and final assembly line and, so called total

final assembly automation ratio is 20% as the top class not only in U.S. but also in Japan. The

plant also introduced FMS line, therefore, which can respond for 5 or 6 mixture cars production.

MMMA produced 21 hundred thousand cars in 1995 as the top record but it still

improved its profitability not yet. Its accumulating red figure is $ 80 million in 1995. Its amount

of over debt was $ 40 million same year. In 1996 Mitsubishi invested additionally $ 54 million.

Using this new invested money MMMA paid MMMA' total debt. MMMA also cut their R&D

cost about 20% e.g. almost $ 20 million. It is also cutting parts purchasing cost, then MMMAs

final target is decreasing break-even point down to 1.9 or 1.4 hundred thousand number of

vehicles per year.

What is the reason which explains why MMMA's profitability becomes bad? Main

reasons come from huge burden of initial investment and marketing power shortage. MMMAs

plant in Illinois is most modernized plant but its total initial investment with higher automation is

too much high. The plant introduced flexible manufacturing line but its operating ratio

experienced too much frequent change. Especially introduced new car, such as from Mirage to

Galant exchanged model and fully model change of Eclipse, tended to production line

trouble and longer time for production line change. After all, FMS line did not operate

completely. On the other hand Mitsubishi' car marketing power in North America is not so

strong because Mitsubishi has too much delayed its establishment of own channel on behalf of

old Mitsubishi-Chrysler agreement. Chrysler' marketing channel in late l980sand early 1990s had

also weak point. This marketing weak point reflected to MMMA' plant operation ratio


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declining. But after reconstruction strategy started MMMAs profitability in 1997 is going to

improve for one year. Even though MMMA is still confronting hard time not only by

trouble but also by marketing in US market.

Nevertheless in spite of in spite of its business difficulty in US, on the other hand, Mitsubishi's

Asian strategy is going on very successfully. In this area, especially ASEAN area,

Mitsubishi's presence has been quite important such as Toyota after the 1970s. On behalf of

its agreement with Chrysler, Mitsubishi lost its business chance in North America until early

1980s, and then M.M.C. strengthened its Asian strategy. Basically, its Asian strategy consists of

four parts, Korean, Taiwan, China and ASEAN countries. In Korea M.M.C. started enginetechnology transfer to Hyundai Motors in 1975 then Mitsubishi invested 15 % ownership

of this company with Mitsubishi shoji in 1982.In this time M.M.C. Assisted car

manufacturing technical know-how to Hyundai. Some model of the Mitsubishi such as Granger

which is one of the luxury model was directly transferred to the Hyundai by giving

technical license base. In this alliance it was given to available license fee to Mitsubishi

for a while. Soon or later, Hyundai developed is car by itself with lessen help by Mitsubishi.

Comparing with Korea, Mitsubishis fully support for China Motor Company (C.M.C.) is a

very successful business in Taiwan. In early stage Mitsubishi assisted C.M.C by light truck and

small R.V. But year by year C.M.C' business situation has been promoted and Mitsubishi

transferred its passenger car technology. After all C.M.C. total market share became number

one in Taiwan Market as 15%. But Taiwan auto markets were opened to western auto makers

and competitive situation became very tough. After all, Mitsubishi and C.M.C. have a plan to

invest main land China. This project, however, is established not yet although Mitsubishi is still

keeping its technical license agreement with several Chinese companies. But in the near futuresome possibility in C.M.C. new investment for Fukan with collaborating with Malaysian Proton

still exists. C.M.C. has already entered Mitsubishi's ASEAN division of labour network. In

ASEAN area Mitsubishi's strategy has been very aggressive because its North American

strategy was unlimited by Mitsubishi-Chrysler collaboration agreement until 1982. In this


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region Mitsubishi developed its CKD production bases in each ASEAN countries and

established its parts and components division of labour network. From 1970 on Mitsubishi

followed in each ASEAN countries auto industry its local promotion policy, collaborating

with local government and capital; it founded many local joint venture companies in; each

country to produce SKD and CKD, assembly plants, main components, engine, transmission

and die-casting parts, and so on.

Mitsubishi's ASEAN business contents are:

In Malaysian Proton company M.M.C. is jointly producing press parts, die-casting,

engine assembly, and body and final assembly.

In Indonesia M.K.M. company and others produce press parts, and assembly engine and

body of Mitsubishi's vehicle,

In Philippines PAMCOR and ATC Company produce parts, and assemble body

and transmission.

In Thailand MSC company assembles engine, body and vehicle.

Among these plants in ASEAN countries Mitsubishi complementary supplies parts andcomponents each other on the base of B.B.C. (Brand to Brand Complementation) schema.

After 1996 the AICO (ASEAN Industry Corporation Organization) agreement being started,

Mitsubishi is going to change from B.B.C. base to AICO base. AICO schema includes supplier

based division of labour network in which supply parts and components complementary in

ASEAN area. From now, therefore, Mitsubishi's ASEAN strategy may become more

comprehensive including global suppliers.

This year Mitsubishi introduced new Asian car. This car is a van typed family wagon with 1.5

liter engine, and produced in Taiwan, Thailand and Philippines on the base of

complementary components supply. In this project Mitsubishi will use AICO schema with

enhancing local contents ratio; pursuing this way Mitsubishi will educate strongly its local


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vendors with world-wide special quality guarantee by Mitsubishi.

Soon or later Mitsubishi's total production of this area will become 6 hundred thousand

including Australia. Mitsubishi third important production base is Holland NED Car Company in

Europe. This plant is the joint venture business with Volvo. Many people are much interested in

the encounter of Volvo production system and Mitsubishi production system.

Nevertheless, NED Car's main product depends on Mitsubishi small car, and then Mitsubishi

production system becomes dominant. Its car production capacities are one hundred thousand

and some of them are exported to Japan.

In general, Mitsubishi has developed its product by centralized R&D center in Okazaki. It hasthe design center in U.S. and Europe. Both organizations supported Okazaki center.

And Okazaki center is every time watching and bench marking local parts Q.C.D.E level from

the point of view of global sourcing.


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Chapter 3

ANALYSIS II

SWOT ANALYSIS

Strength

1. One of the most popular brands in the automobile industry with excellent advertising and

brand presence.

2.

Wide range of products from sedans to SUVs to hatch backs to motorsports.3. The Corporation has seven vehicle manufacturing facilities in five countries, Japan,

Netherlands, Philippines, Thailand, United States and Brazil.

4. Have over 30,000 employees in the company.

5. It is a global brand having a wide geographic reach with strategic alliances.

6. The strong reputation of Mitsubishi as one of Japan's leading can markers engendered a

partnership with the Chrysler Corporation only 12 months after Mitsubishi opened its

doors.

7. The Mitsubishi in-house electric vehicle eliminates the need for gasoline and possesses

many other features, including lithium-ion battery technology that provides prolonged

engine life.

8. Mitsubishi has had its share of financial problems, but wise corporate leadership has

helped the company rebound into a stronger company, according to Funding Universe.

9. Support for the next generation- supporting the education of the next generation to create

a prosperous future.

10. Traffic safety- contributing to traffic safety education and the spread of safe driving tostrive towards a zero accident society.

11. Environmental preservation.

12. Participating in local community


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Weakness

1. Economic crisis due to Earthquake in Japan hurt the company financially. 2. Decline in vehicle sales. 3. Image of low quality makers. 4. Low employ productivity

Opportunity

1. Developing hybrid cars and fuel efficient cars for the future.

2. Tapping emerging markets across the world and building a global brand.

3. Fast growing automobile market.

4. International growth.

5. New product line.

6. Acquisition of new brands

Threats

1. Government policies for the automobile sector across the world.

2. Ever increasing fuel prices.

3. Intense competition from global automobile brands.

4. Substitute modes of public transport like buses, metro trains etc.

5. Competitions from global players.6. Global economic factors.

7. Environmental regulations


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PEST ANALYSIS

POLITICAL

Since Mitsubishi Motors operates in multiple countries across Europe, Africa, Asia, theMiddle East, and Australia, it needs to pay close attention to the political climate but also laws

and regulations in all the countries it operates in while also paying attention to regional

governing bodies. Laws governing commerce, trade, growth, and investment are dependent on

the local government as well as how successful local markets and economies will be due to

regional, national and local influence.

In accorda nce, Mitsubishi s headquarters in japan, strictly controls and regulates

operations in all dealerships and subsidiaries, in addition to knowing and abiding by all labor laws in the multiple countries where they have manufacturing plants it has to watch political

change. This will be especially vital in the future as Mitsubishi Motors continues to expand and

grow into new markets. While currently about 18% of its revenues are from international

business, the company's objective is to expand its international business, both through organic

and inorganic growth routes. The foundation of the companys growth internationally is a deep

understand of economic stimulation, customer needs, and individual government regulations and

laws. Although it is the headquarters ultimate responsibility to make sure each individual office

and branch is operating and abiding by the local laws, it will become increasingly more

important for that duty to be taken care of at the regional or even local level.

ECONOMIC

Operating in numerous countries across the world, Mitsubishi Motors functions with a

global economic perspective while focusing on each individual market. Because Mitsubishi is ina rapid growth period, expanding or forming a joint venture in over five countries world-wide

since 2004, a global approach enables Mitsubishi Motors to adapt and learn from the many

different regions within the whole automotive industry. They have experience and resources

from five continents across the globe, thus when any variable changes in the market they can

gather information and resources from all over the world to address any issues. For instance, if


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the price of the aluminum required to make engine blocks goes up in Kenya, Mitsubishi has the

option to get the aluminum from other suppliers in Europe or Asia who they would normally get

from for production in Ukraine or Russia.

Mitsubishi Motors also has to pay close attention to shifts in currency rates throughoutthe world. Currency fluctuations can equate to higher or lower demands for Mitsubishi vehicles

which in turn affect profitability. It can also mean a rise in costs or a drop in returns. But they

also have to pay attention to not just the domestic currency, the yen, but also to the dollar, euro,

won, and pound, to just name a few. Just because the rupee is strong against the dollar does not

mean it is strong against all the other currencies. Attention to currency is important because it

influences where capital investment will develop and prosper.

SOCIAL

Undoubtedly, the beliefs, opinions, and general attitude of all the stakeholders in a

company will affect how well a company performs. This includes every stakeholder from the

CEO and President, down to the line workers who screw the door panel into place, from the

investor to the customer, the culture and attitude of all these people will ultimately determine the

future of a company and whether they will be profitable or not. For this reason, MitsubishiMotors tends to use an integration and rarely separation technique with foreign companies they

acquire.

On the other hand, some economic issues that Mitsubishi Motors face must also be

looked at from a more localized perspective. For instance, the market in India for cars is much

different than the market for cars in Italy. For one, India has over one billion more people than

Italy does, thus the market is much larger or not as limited. Second, you must also take into

effect the demographics and the average income of each market. Italians have a higher averageincome per capita than Indians and Italian citizens tend to drive larger and fancier cars. For this

reason, the Mitsubishi Cedia might not do so well in the Italian market. In summation,

Mitsubishi Motors views the economy from a global perspective with operations across the

entire globe; however, they must also maintain a local market understanding and knowledge


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when it comes to product positioning and placement throughout the different markets Mitsubishi

conducts business in.

In 2004, Mitsubishi Motors acquired Daewoo Commercial Vehicles Company, which

was at the time Koreas second largest truck maker. Rather than using de -culturation or assimilating Daewoo, Mitsubishi took an integrated approach, and continued building and

marketing Daewoos current models as well as i ntroducing a few new models globally just as it

had been done under Korean management.

With the new acquisition of Daewoo and Nippon, Mitsubishi will have to be careful with

how they handle the acquisition. While Daewoo is thriving while under the helm of Ford,

Nippon was more of the trouble child. Nippon cost Ford some $10 billion during its 18 -year

stewardship and its sales were in headlong decline, especially in America, its most importantmarket. Industry analysts also struggled to see what value Mitsubishi could add that had eluded

Ford, and what synergies there could be between a maker of trucks and basic cars and two

luxury marques. (Economist). Separation could be a good approach for the immediate future to

keep the name of Daewoo and Nippon distinguishable and associated with the luxury automobile

market. Overall, Mitsubishi does a good job of integrating some aspects of their large multi-

national conglomerate into new acquisitions; however, the company must also understand that

separation from the name Mitsubishi can be valuable in some social areas.

TECHNOLOGY

Mitsubishi Motors and its parent company, the Mitsubishi Group, are ahead of the game

in the technology field. The Mitsubishi Group as a whole has over 20 publicly listed enterprises

and operates in more than 80 countries world-wide. This equates to Mitsubishi Motors having

lots of experience and resources to draw from for research and development purposes. Thefoundation of the companys growth is a deep understanding of economic sti muli and customer

needs, and the ability to translate them into customer-desired offerings through leading edge

R&D (Mitsubishi). Employing 1,400 scientists and engineers, Mitsubishi Motors Research and

Development team is ahead of the pack in Indias ma rket and right with the rest of the field

internationally. Among Mitsubishis firsts are the first indigenously developed Light


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Commercial Vehicle, India's first Sports Utility Vehicle and, in 1998, the Mitsubishi Lancer,

India's first fully indigenous pa ssenger car, as well as the increasingly famous Mitsubishi Cedia,

which is projected to be the worlds cheapest production car (Mitsubishi). In the automotive

industry, it is becoming increasingly crucial for manufacturers to stay on top of the technology

curve with new problems always rising such as escalating gas prices and pollution problems.

Mitsubishi recognizes this and dedicates lots of resources and time into research and

development to be even with or preferably ahead of other competitors, global trends, and

changing economies. In all, an automobile manufacturer must change, adapt, and evolve to stay

competitive in the automotive game, and this is exactly what Mitsubishi is doing with their rapid

growth, and extensive research and development.


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CHAPTER 4

CONCLUTION

The tendency of global networking for local production is spreading not only among Japanese

car makers but among GM, Ford and European makers such as VW, BMW and Mercedes Benz.

Among these makers the most attractive plan is Ford' ambitious "World Car strategy" and

"Global Sourcing strategy".

In 1994 Ford publicized Ford 2000 project as its 21st Century grand strategy with new world

car strategy. In this project Ford exhibited its grand design targets as follow: Advancing effectiveness by global integration of Auto R&D, Design and

Production.

Reorganization and vitalization of bureaucratic organization. Active entrance for new developing market like China, India, Latin America and

ASEAN countries. Strengthening established market share.

Global advancing R&D cost cutting and quality improvement by suppliers

integration.

A "world car" developed and produced with a global strategy and allocated locally with a

global network of suppliers by global sourcing is Ford's global strategic plan for the 21st

century. People said this "world car project is very risky becaus e GM's "world car" concept

1980 was unsuccessful. It is true that among the other auto makers except Ford there is question

whether or not the local compatibility responding to regional customer needs can be attained

with "world car" product differentiation. It is not impossible, though, to integrate productdevelopment under a global strategy, and to differentiate car body design using three

dimension CAD/CAM with speedy information exchange. As opposed to a decade ago, it has

become much easier to have a world-wide choice and integration of suppliers and their

network now that we have better information technology. A world-wide distribution system,


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closely integrated with the information revolution have aided in the globalization of

development and purchases. Databases for the development parts purchasing systems, as well as

the quick utilization of accumulated information through networking, have helped in this regard.

It is true that international logistics of parts and components mutual supply became less

risky rather than before when information technology advanced not so much. Fords world

car" strategy will become more changeable in its contents, as shown by Ford 2000 catch-

phrase "Think Globally, Act Locally, with Agility". This strategy, however, different from GM

"world car" before, may have somehow possibility towards future success. If this ambitious

strategy can realize, it will have a big impact toward world automotive society.

Not only with Ford 2000, but also in the world automobile industry major

auto makers -whether or not using the name "world car" are moving towards

world-wide car production and supply networking based on global product development

and platform communization, connecting with their home country with overseas eminent

markets, and production bases. The internationalization of development and purchases can

also serve as a buffer to lessen the impact of exchange-rate fluctuations through the

flexible networking of supplying parts between regions. German auto makers, whose labour

costs are quite high, as well as the Big Three, have displayed great interest in these types of

international purchases, among others. Different regions offer different advantages for the purchase of auto parts, such as lower distribution costs. In a globalized network, goods will be

purchase based on cost comparisons of the optimum product in a prime location. Even GM is

moving toward global networking strategy almost similar to Ford strategic behavior in its core

elements. Japanese auto makers who have begun to get on the right truck for their local

production, and European auto makers, who are challenging the global strategy, are following

this behavior or taking a more independent approach. As the automobile industry becomes

internationalized, it is necessary to build a global network for developing and supplying cars, as

well as the purchase of parts, while avoiding exchange risk as much as possible. With a

decrease in the number of suppliers internationally, the question of how they should merge

and how localization will balance with globalization is the main challenge facing the auto

industry.


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Bibliography

Mitsubishi Motors: Facts & Figures, Mitsubishi Motors Corporation, 1996.

The Japanese Automobile Industry - A Business History, Athlone Press, 1994.

"Prospect of Global Sourcing", Nikkan Jidosha Shinbun, Oct. 3, 1995

http://en.wikipedia.org/wiki/Mitsubishi

http://en.wikipedia.org/wiki/Mitsubishi_motors

http://www.mitsubishi-motors.com/
http://en.wikipedia.org/wiki/Mitsubishihttp://en.wikipedia.org/wiki/Mitsubishihttp://en.wikipedia.org/wiki/Mitsubishi_motorshttp://en.wikipedia.org/wiki/Mitsubishi_motorshttp://en.wikipedia.org/wiki/Mitsubishi_motorshttp://en.wikipedia.org/wiki/Mitsubishi

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