Rumor has it that Mitsubishi is working on a return of the Lancer Evolution as a high performance sedan and hatchback. The car could be one of the first results for Mitsubishi of joining the Alliance with Nissan and Renault. The new Lancer Evolution would use the alliance's modular CMF platform, shared with the next generation Renault Megane RS.
Under the hood would be the powertrain from the Megane, a turbo-charged 2.0-liter 4-cylinder producing up to 341 horsepower. While the Renault would stick with front-wheel drive, the Mitsubishi would get a version of their S-AWC all-wheel drive system.
As Renault is just now updating the current Megane line, any Mitsubishi Evo that comes from it is still years away and yet to be green-lighted. So don't hold your breath just yet.
Mitsubishi dealers are living in interesting times. After a tumultuous fall in sales after the recession, the last year and a quarter has given Mitsubishi double digit gains in sales. Sales for 2018 rose 14 percent and so far this year, sales are up an astonishing 17.6 percent.
The question for Mitsubishi is where do they go from here? With two small crossovers, a large one, and a subcompact car, the next logical answer for their dealers is adding a mid-size pickup to the mix. Mitsubishi last offered a pickup in the Mitsubishi Raider which was a rebadged Dodge Dakota.
Now part of the Nissan-Renault alliance, Mitsubishi is reportedly taking the lead on building the platform for the next line of trucks for the trio. Mitsubishi currently builds the Triton for other global markets, while Nissan fields the Navara, and Renault produces the Alaskan. All three would be consolidated to a single platform headed by the Mitsubishi effort in about 5 years. Five years is an eternety in the automotive world, but it may be that the dealerships would need to wait that long to get their wish.
It was recently revealed that Nissan is working on a next generation Nissan Frontier, but that truck will use an updated version of its current platform rather than move to a global one. Still it is possible that a future Frontier could move to the Mitsubishi based platform that is years away from production.
In the meantime, Mitsubishi is working to expand its dealership network. There are some markets in the US where the brand is non-existent. So Mitsubishi is looking to expand in markets like Los Angeles, San Francisco, Houston, New York, and Boston.
Mitsubishi is starting to find its footing thanks to the alliance it formed with Nissan towards the end of 2016. The company last year that it plans on "launching 11 new and redesigned models" for the U.S. Two of the models have go on sale this year, the Eclipse Cross and Outlander Plug-In Hybrid. But what about the other nine? Motor Trend has learned some details on a fair number of vehicles in the cards.
Outlander: Redesign coming in 2021 and will use the underpinnings of the Nissan Rogue,
Outlander Sport: To be redesigned in 2022. Will be based on the platform that is used on the Nissan Rogue Sport and upcoming Kicks.
Hybrid/Electric Models: Mitsubishi is planning to offer a plug-in hybrid or pure electric powertrain for all of their models.
Possible Midsize Truck: The number one request of Mitsubishi's U.S. dealers is a midsize truck. Mitsubishi is reportedly studying a truck for the U.S. But for the truck to get approval, it needs to make sense for the alliance to move forward. If approved, the truck would likely be built in the U.S. to avoid the chicken tax.
Source: Motor Trend
Mitsubishi's lineup in the U.S. is very thin, but that will change soon as the Japanese automaker introduces the new Eclipse Cross and Outlander PHEV crossovers. This is part of an effort to boost sales 30 percent for the U.S. by 2020. While the focus for the U.S. will be on crossovers, Mitsubishi Motors CEO Osamu Masuko hinted that other products could be in the pipeline if they leverage their alliance with Nissan-Renault.
In an interview with Automotive News, Masuko said the opportunity to launch new products will come after 2020. This is when Mitsubishi is expected to share powertrains and platforms with Nissan-Renault. One of those new products could be a sedan.
"But we don't have plans to develop a sedan on our own. It wouldn't be just a rebadge. The design will be completely different. We would like to clearly differentiate our models and show the special characteristics of each company," said Masuko.
We're wondering if this sedan could be the replacement for the aging Lancer compact or discontinued Galant sedan. Masuko said there are no concrete plans at this time for the sedan.
Automotive News followed this up by asking if there is the possibility of a pickup truck for the U.S.
"The pickups we make are not so big. But the American market requires big-size pickup trucks," said Masuko.
"We are focused on developing pickups for non-U.S. markets such as [Southeast Asia] and the Middle East. So for the U.S., if there is an opportunity, we might get it from Nissan. We would like to consider if there are opportunities from within the Alliance."
Source: Automotive News (Subscription Required)
Don't expect Nissan to help out in the U.S. however.
Mitsubishi has unveiled a new three-year strategic plan called 'Drive for Growth'. The Japanese automaker wants to increase unit sales and revenue by 30 percent - about 1.3 million vehicles sold in the case of the former. It also plans on improving profit margins from 0.3 to 6 percent. To pull this off, Mitsubishi will be working on reducing costs in development and manufacturing, along with investing $5.3 billion for new products and revamping key markets.
In terms of products, Mitsubishi is planning on launching 11 new and redesigned models over next three years. For the U.S., this means the Outlander PHEV and upcoming Eclipse Cross. The U.S. will also see Mitsubishi work on improving their dealer network.
"We will re-energize our dealership network. We are reviewing our incentive plans, both to attract new dealers and to encourage existing ones to achieve better sales," said Trevor Mann, COO of Mitsubishi Motors.
The goal is to see a 30 percent increase in sales to 130,000 vehicles by the 2019 fiscal year.
For other markets, this is what Mitsubishi is planning,
For Southeast Asia (Mitsubishi's largest and most profitable marketplace), a new assembly plant in Indonesia and the launch of Xpander multi-purpose vehicle
The focus in Japan is revitalizing their mini-car business after the fuel economy manipulation scandal
China will see an expansion in dealers with the goal to sell 220,000 vehicles by 2019
There will be one thing the U.S. will be missing out from Mitsubishi. It was expected that the tie-up with Nissan that begun last year would provide some help for the U.S. But according to Automotive News, Mitsubishi will be going on its own for this region. There are three reasons for this; antitrust concerns between the two companies, vehicles using common engines and platforms not being ready, and Mitsubishi wanting to build the brand back up on their own strengths.
Source: Mitsubishi Motors, Automotive News (Subscription Required)
Press Release is on Page 2
MITSUBISHI MOTORS LAUNCHES ‘DRIVE FOR GROWTH’ PLAN TO INCREASE VOLUMES, REVENUES AND PROFITABILITY
Three-year plan targets more than 30 percent increase in unit sales and revenues
Operating profit margin to reach 6 percent or more
Capital expenditure and R&D investment to increase to more than 600 billion yen over the three-year period
Product renewal to accelerate with launch of six new models including Eclipse Cross SUV
Market expansion planned in ASEAN, US and China
TOKYO, Japan – Mitsubishi Motors today launched "Drive for Growth," a three-year strategic plan to deliver sustained and profitable growth, targeting an increase of more than 30% in both annual unit sales to 1.3 million vehicles and in revenues to 2.5 trillion yen.
Under the plan, Mitsubishi Motors aims to achieve an operating profit margin of 6% or more by the end of fiscal 2019, up from 0.3% in fiscal 2016. The plan combines a product renewal program with targeted market expansion and operating efficiency improvements.
Osamu Masuko, Mitsubishi Motors chief executive, said: "Drive for Growth is a new roadmap for Mitsubishi Motors. We will rebuild trust in our company as our highest priority, successfully launch new vehicles, and achieve a V-shaped financial recovery. These will be the foundations for our future sustainable growth, which will involve increased capital expenditure and product development spending."
The Drive for Growth plan involves a 60% increase in annual capital expenditure to 137 billion yen in fiscal 2019 – lifting spending as a proportion of sales to 5.5% a year. R&D expenses will rise by 50% to 133 billion yen over the same period. In total, this will amount to more than 600 billion yen in investments. Even with these increases, Mitsubishi Motors will maintain financial discipline and generate positive free cash flow during the period. The company intends to establish a competitive dividend policy comparable to those of other Japanese automotive manufacturers.
As part of its investment drive, Mitsubishi Motors plans to strengthen its four-wheel drive SUVs and pick-ups, and to launch 11 models including the XPANDER and Eclipse Cross. The product renewal program will coincide with a market expansion drive in the ASEAN region, Oceania, United States, China and Japan.
Mr. Masuko said: "This is an ambitious program to maximize our strengths in growing product segments, especially four-wheel drive, and to pursue growth in markets where our brand has strong potential, particularly the ASEAN region. This growth program will also involve an efficient and disciplined operating structure as we continue to manage costs."
Under Drive for Growth, Mitsubishi Motors is targeting a market share of 10% in ASEAN. Sales activities will be reinforced in the US. The company's presence in China will be strengthened with the introduction of models such as the Outlander and Eclipse Cross. And the company will invest in its sales network and product portfolio to return to profitability in Japan by the end of the plan.
The strategic plan is based on three strategic initiatives:
Product renewal: During the period of the plan, Mitsubishi Motors will launch 11 new models, of which six will be entirely new model changes – averaging two each year – while the remainder will be important updates of existing vehicles. By the end of the plan, the company expects its five best-selling global models consisting of SUV, 4WD, and plug-in hybrid electric vehicles (PHEV) to account for 70% of total sales volume. Reflecting the shift to lower emission models, the company also announced that it plans to provide electrified solutions across its core model range including an EV kei car from 2020.
Focus on core markets to drive revenue growth: This year's opening of a new assembly plant in Indonesia, and the recent launch of the XPANDER multi-purpose vehicle, will drive the growth of the ASEAN business, the group's largest and most profitable operation. ASEAN volumes are expected to rise from 206,000 units a year to 310,000 units a year in 2019. Mitsubishi Motors will also launch new models to assist the turnaround of its important mini-car business in Japan. In the US, the company will improve its dealership networks, targeting a 30% increase in unit sales to 130,000 units in fiscal 2019. In China, Mitsubishi Motors will double the number of dealerships and more than double sales to 220,000 units in fiscal 2019.
Cost Optimization: Mitsubishi Motors will tightly manage production costs, with a target to reduce monozukuri costs by 1.3% per year, in spite of large investments in R&D. Alongside cost management, the company will benefit from growing synergies from its membership of the Renault-Nissan-Mitsubishi alliance. Mitsubishi Motors is seeking synergies totaling more than 100 billion yen over the course of the plan, with the bulk of these to come from efficiencies in procurement and costs avoided in R&D.
Mitsubishi Motors will contribute its expertise in PHEV technology, its capabilities in SUVs and pick-ups, and market strengths in the ASEAN region to the wider synergy program of the Alliance, which aims to double annualized synergies to more than 10 billion euros by the end of 2022.
"We are refreshing our product line-up, investing in R&D and targeting core market growth," added Mr. Masuko. "Drive for Growth will enable us to continue the transformation of the company over the next three years."
There is some hope for Mitsubishi performance fans
There are a small group of people who want Mitsubishi to do a follow-up to the Lancer Evolution. The good news is that Mitsubishi is considering it. The bad news is that it will be awhile as the company has some other issues it needs to work out.
According to Motoring, Mitsubishi global boss Trevor Mann said a performance model was on the table for future products.
“In terms of the brand, I think it would be interesting to bring something back that’s a bit more sporty in the future. You’ll have to wait and see what that is.”
Those who are hoping for another performance sedan will be disappointed as Mann said it would likely come in the form of an SUV, something Mitsubishi has said before. Also, it will be awhile before this product could show up.
“I would say [a new performance model] it is long-term rather than mid-term,” Mann said.
“It will be between three years and six years.”
Mann also hinted that Mitsubishi was considering a return to motorsports. The company has a long and storied history with various models competing in the World Rally Championship and Dakar Rally.
“Motorsport is something that we’ve talked about a lot recently, and because of our heritage it’s something that we’ve got to consider,” said Mann.
“It goes with the brand and it’s something that we’ve got the technology in and our engineers know what to do. It’s something we need to consider again.”
Pic Credit: William Maley for Cheers & Gears
Mitsubishi is planning to announce a blueprint on how it plans to rebuild itself in September, but the company's Chief Operating Officer Trevor Mann dropped some breadcrumbs of what could be included.
Speaking with Automotive News, Mann explained that the United States, China and Southeast Asia would play key roles in Mitsubishi's recovery. For the U.S., Mann hinted that Mitsubishi could tap help from Nissan or Renault on a new sedan (our guess would be compact or midsize). There is also talk about a pickup using a platform from Nissan.
"It's something that we should look at. As we go forward and start to have common platforms, an alliance pickup platform would be quite an appropriate thing for us to do," said Mann.
Mitsubishi may also consider building vehicles in the U.S., possibly piggybacking off a Nissan plant. Last year, Mitsubishi closed down their Normal, Illinois plant as it was unable to find a buyer for it.
But these ideas are for the future. In the near future, Mann said Mitsubishi will focus on their lineup of crossovers in an effort to take advantage of growing demand for these vehicles.
"The answer to your prayers is not just adding nameplates. You've got to make sure the nameplates you've got are working for you. And we've got scope for improvement."
Source: Automotive News (Subscription Required)
Two of Mitsubishi's key products have been pushed back
We have been wondering what kind of impact the Mitsubishi and Nissan alliance would bring to the table. According to a report from Automotive News, it looks like delays for a couple of key products for the diamond star brand.
Speaking with supplier sources, Mitsubishi has pushed back the redesigns of the Outlander and Outlander Sport crossovers. Originally, Mitsubishi was planning to launch the next Outlander "in the fiscal year ending March 31, 2019", while the Outlander Sport would follow a year later. Now, the Outlander has been pushed back to late 2019 or 2020 and the Sport to after 2020.
The delay is due to a review being undertaken by Mitsubishi and Nissan to search for a way to share architecture and parts with the Rogue and Rogue Sport. According to sources, the goal is to "commonize underpinnings and components" to save money while keeping an outer identity distinct to each brand.
Mitsubishi confirmed the review but declined to comment on any delays.
This delay could be a big blow for Mitsubishi's dealers in the U.S. who have been clamoring for new products. Joe Bizzarro, chairman of Mitsubishi's national dealer advisory board told Automotive News that no such delay was discussed during a meeting with dealers earlier this year - leading us to suspect this delay has come up recently. Dealers have yet to be notified about this delay.
Right now, the only new product destined for Mitsubishi's U.S. dealers is the upcoming Eclipse Sport due in early 2018.
Source: Automotive News (Subscription Required)
There will be one less compact car on sale come August. Motor1 has learned from Mitsubishi Motors North America’s executive vice president and chief operating officer, Don Swearingen that production of the Lancer compact sedan will end this August. Of course. you are probably saying to yourself that Mitsubishi was still building the Lancer?! The answer is yes.
Will Mitsubishi have a replacement for the Lancer, especially considering the partnership with Nissan? Swearingen said no. He told Autoblog that the sedan marketplace is shrinking and the Japanese needs to focus on products that make them money. Hence why they are focusing on crossovers with a new model that is slated to slot between the Outlander Sport and Outlander due later this year.
The Lancer was never a big seller for Mitsubishi. Its best year was back in 2002 when the company moved 69,000 Lancers. In 2016, Mitsubishi only sold 14,304 Lancers.
Source: Motor1, Autoblog
Only a few months after Nissan announced it would buy a controlling stake in Mitsubishi Motors, the deal is now official. Nissan will pay 237 billion yen (about $2.29 billion) to purchase a 34 percent stake into Mitsubishi. As part of this deal, Nissan CEO Carlos Ghosn will become Chairman of the Board. Osamu Masuko will remain Mitsubishi Motors CEO and President.
"I welcome Nissan's willingness to provide strategic, operational and management support as our new lead shareholder. As part of our Board and management team, Nissan will help us to rebuild customer trust in our company and maximize potential future synergies through our deeper alliance," said Masuko in a statement.
With Ghosn becoming chairman at a third company (he also holds the role at Nissan and Renault), he has appointed Nissan Vice Chairman and Chief Competition Officer Hiroto Saikawa as his co-CEO at Nissan.
The two companies are planning to collaborate on joint purchasing, localization, factory sharing, and using common vehicle platforms. Ghosn says this will help bring savings totaling $231 million next year and rising the year after.
"We are committed to assisting Mitsubishi Motors as it rebuilds customer trust. This is a priority as we pursue the synergies and growth potential of our enlarged relationship," said Ghosn.
Source: Mitsubishi Motors, Automotive News (Subscription Required) Press Release is on Page 2
Mitsubishi Motors Joins Renault-Nissan Alliance
MMC to receive strategic, operational and management support from Nissan
Synergy benefits to enhance MMC profit margins and earnings per share
Carlos Ghosn, Nissan chairman and CEO, named chairman-elect of MMC
New role created of Director for Global Risk Control
Tokyo , October 20 , 2016 – Mitsubishi Motors Corporation (MMC) announces that Nissan Motor Co., Ltd. (Nissan) has become its largest shareholder after completing the purchase of 34% of MMC-issued stock for 237 billion JPY.
As part of Nissan's strategic investment, MMC will become a full member of the 17-year strong global alliance between Nissan and Renault – paving the way for synergies to enhance profit margins and earnings per share.
Nissan Chairman and Chief Executive Officer Carlos Ghosn has been nominated to become chairman of the Board. Ghosn will be joined by three other Nissan nominated directors, including Mitsuhiko Yamashita, Nissan's former executive vice president of research and development, who joined MMC earlier this year as head of development. The other nominees are Hitoshi Kawaguchi, Nissan chief sustainability officer and head of global external affairs, and Hiroshi Karube, Nissan global controller and global asset manager.
MMC President and Chief Executive Officer Osamu Masuko requested that Nissan also provide a senior executive to join the company's executive committee to bolster MMC's management. Trevor Mann, currently Chief Performance Officer of Nissan, will become Chief Operating Officer of MMC.
"I welcome Nissan's willingness to provide strategic, operational and management support as our new lead shareholder," said Masuko. "As part of our Board and management team, Nissan will help us to rebuild customer trust in our company and maximize potential future synergies through our deeper alliance."
MMC will appoint a new role of director for global risk control to report directly to the chief executive officer, who will oversee compliance and risk control. This director will regularly report to the board on moves to enhance governance at MMC.
The three largest institutional shareholders in MMC – Mitsubishi Heavy Industries, Mitsubishi Corporation and The Bank of Tokyo-Mitsubishi UFJ – have welcomed Nissan's investment and pledged their support for its board nominees. Moving forward, these three Mitsubishi institutional shareholders together with Nissan will maintain a more than 51 percent of the share capital.
Nissan and MMC will begin cooperating on a wide-ranging synergy program, building on a five-year alliance in minicars between the two companies.
The two companies have identified a number of valuable synergies in areas including:
- Joint purchasing cost-reduction
- Deeper localization in operations around the world
- Joint plant utilization
- Common vehicle platforms
- Technology sharing
- Cooperation in emerging and developed markets; and
- The use of the Nissan Sales Finance Company to serve MMC customers in any market where mutually beneficial.
The partnership is expected to generate significant recurring synergies for MMC, equivalent to a 1 percentage point increase in operating profit margin in fiscal year 2017, 2 percentage points in fiscal year 2018, and more than 2 percentage points in fiscal year 2019. The projected synergies are also forecasted to enhance MMC earnings per share in fiscal year 2017 by 12 yen per share, and by 20 yen per share in fiscal year 2018.
Ghosn said: "The expanded Alliance will be one of the largest automotive groups in the world, with annual sales of 10 million units in fiscal year 2016. The addition of Mitsubishi Motors will build on the entrepreneurial spirit and management cooperation that has characterized our alliance with Renault for 17 years. I am confident this will benefit all stakeholders."
Carlos Ghosn could become the head of Mitsubishi Motors
Progress seems to be going on with Nissan taking a 34 percent stake in Mitsubishi Motors. Japanese business paper The Nikkei reports that Nissan CEO Carlos Ghosn will become the chairman of Mitsubishi Motors once the deal is set. Sources tell the Nikkei that current chairman and president Osamu Masuko has been asked to stay on as president. When reached for comment, spokespeople at Mitsubishi and Nissan declined to comment. However, Masuko has confirmed that he was asked to stay on as president by Ghosn. Masuko went on to say that this would be discussed further tomorrow.
Nissan is planning to send four of its directors, including Ghosn to Mitsubishi Motors to right the ship after it was revealed that a number of Mitsubishi vehicles had false fuel economy figures.
Ghosn has a track record of bringing beleaguered companies to full heath - Renault in the 1990s and Nissan in the early 2000s. Some analysts believe this is right move.
"This is a man who patched up Renault in the 1990s, and he did a lot for Nissan in the 2000s, so I'm sure he looks at Mitsubishi Motors as a new challenge," said CLSA analyst Christopher Richter to Reuters.
"He's a turnaround artist. This is what he does best," said Richter. Ghosn at the helm of Mitsubishi Motors' board would "remove an enormous burden from the Mitsubishi group companies."
“It’s easier for him to do things he did at Nissan, such as combining platforms, cutting costs and even closing plants. In order to implement such massive restructuring, you need someone as powerful as Ghosn to get things going,” said Koji Endo, a Tokyo-based auto analyst at SBI Securities Co to Bloomberg.
Others aren't too keen.
“I think he has enough work to be done at both Renault and Nissan. He should also spend all his time in these two companies rather than taking on another job in Japan,” said Hans-Peter Wodniok, a Frankfurt-based analyst with AlphaValue.
Source: Nikkei, (2), Reuters, Bloomberg
Mitsubishi's fuel economy mess in Japan isn't getting any better. The Wall Street Journal reports that the Japanese automaker continued to improperly test the fuel economy of their vehicles a month after admitting that it had manipulated fuel economy figures on their Kei cars. This accusation comes from a new report from Japan's transport ministry.
“We cannot help but feel concerned that these points haven’t been improved,” said Naoki Fujii, head of the road transport bureau at the ministry.
Japan's transport ministry requires the country's automakers to perform five road tests and take the average of median values. In their report, the ministry explained to Mitsubishi workers how to properly do the test. But workers continued to manipulate the tests. Some examples listed in the report include,
Workers took the average of the best mileage numbers, not the median numbers of the five tests
Mitsubishi didn't tell workers doing the tests that you were only to do five
Mitsubishi Motors chief executive Osamu Masuko said they are taking the continued problems seriously and laid blame at the “lack of capability” at the division responsible for the testing.
Of course, this latest allegation puts some questions to Nissan planned acquisition of a controlling stake in Mitsubishi Motors. The deal - worth $2.2 billion - was expected to be finalized by the end of October. Now, it has been pushed back to the end of the year. Nissan's due diligence investigation is taking longer than expected.
Source: The Wall Street Journal (Subscription Required)
An internal investigation reveals a number of issues that ultimately led to the fuel economy manipulation scandal at Mitsubishi
Mitsubishi Motors brought in investigators to answer a question; why did they manipulate fuel economy figures on a number of their models? The results of the investigation were announced yesterday and it was a combination of various decisions and factors that led to it.
The investigation criticized the company for "not having the manufacturing philosophy of an automaker". A key example comes from the company not rallying their workers to help them back on track after two major scandals. Instead, it was focused on cutting costs wherever it could. This caused Mitsubishi engineers to pull off the impossible task of improving fuel economy on their current engines and not developing new ones. There was also the feeling that workers couldn't speak up about reaching these impossible targets.
The investigation also revealed that management failed to the address the possibility of something fishy going on with the fuel economy testing. In 2005, a new employee brought up concerns about fuel economy figures being made up. This was brushed off by managers. Six years later, a compliance survey addressing other falsifications were not brought to Mitsubishi executives.
“The problem is not only with the testing, certification, or the development department. It’s a collective failure of Mitsubishi Motors as a whole, starting from the management,” said Yoshiro Sakata, one of the investigators appointed by the company at a briefing yesterday.
“I take the panel’s recommendation seriously,” Mitsubishi Motors Chairman Osamu Masuko in a statement.
“The efforts we’ve been making since I took over in 2005 haven’t been enough.”
The investigators made a number of recommendations to prevent something like this from happening again. They include,
Making vehicle certification department independent from the research and development department
Restructure the organization structure
Being more transparent
Be willing to find and tackle violations
Nissan is making sure Mitsubishi is telling the truth
Ever since Mitsubishi admitted to falsifying fuel economy figures on a number of vehicles in Japan, the automaker has been clear that this didn't extend to other markets. Nissan is double checking this claim.
Automotive News reports that Mitsubishi's possible largest shareholder is looking into Mitsubishi's claimed fuel economy numbers in other markets to see if this scandal extended outside Japan. This is part of Nissan's due diligence review before finalizing plans to buy a 34 percent stake in the company.
Nissan CFO Joe Peter tells Automotive News that the review hasn't found any skeletons yet, but they aren't finished with the review yet.
“That would be an issue that could cause considerable concern,” said Peter when asked about false fuel economy figures outside of Japan.
Mitsubishi has a plan for compensating owners in Japan
On Friday, Mitsubishi Motors announced that it will set aside 50 billion yen (about $480 million) this fiscal year to compensate buyers for inflated fuel economy figures. Bloomberg reports that the Japanese automaker admitted that 20 vehicles sold in Japan within the past ten years had false fuel economy data.
Mitsubishi said in a statement they used “desktop calculations” instead of running actual field tests and used the false data on the twenty models built from 2006 to this year. They also lowered the resistance readings on some models to give better fuel economy numbers. Mitsubishi reiterated they didn't find any false fuel economy data on models sold overseas.
The compensation plan will see Mitsubishi pay 100,000 yen (about $955.63) to each minicar owner and pay for the difference in gasoline and taxes separately. Mitsubishi also announced that it expects Japan's transport ministry to approve the recalculated fuel efficiency ratings of its minicars by the end of the month.
One more thing: The investigation being done by three former prosecutors into the scandal are expected to present their results sometime next month.
If there is one thing we have learned with previous scandals in the automotive, it is that it will get worse before becoming better. Such is the case with Mitsubishi and their fuel economy scandal.
According to Reuters, various Japanese outlets are reporting that the inflated fuel economy numbers extend much further than the four models originally announced. The Asahi newspaper says the Japanese automaker falsified fuel economy figures on three additional models, while the Yomiuri newspaper says there are more than ten models with inflated fuel economy numbers. It should be noted these vehicles aren't on sale anymore.
When reached for comment, Mitsubishi declined, saying that its investigation is ongoing.
Two executives step down from Mitsubishi Motors in light of the fuel economy scandal
Tetsuro Aikawa, Mitsubishi Motors' president and COO will be stepping down from the company next month. In a statement released by the company, Aikawa will resign on June 24th, the same date of Mitsubishi's annual shareholders meeting.
Ryugo Nakao, the executive vice president for quality and product strategy will also be stepping down at the same time.
Automotive News reports that Akiawa stepped down for two key reasons. The first was that he was the director of the r&d division that inflated the fuel economy test figures. The second is to give a clean slate for the new development chief, that will likely be installed by Nissan as part of the two companies' new alliance.
“For causing trouble and worry first and foremost to our customers and to all involved, I take responsibility,” said Akiawa.
During a press conference today, CEO Osamu Masuko said he would handle the duties of both people for the time being until replacements are found.
Personnel Changes (Resignation) of Members of the Board
Tokyo, May 18, 2016 - Mitsubishi Motors Corporation (MMC) announced resignation of members of the board as follows:
1. Member of the Board who will resign Tetsuro Aikawa President and COO, Representative Director Ryugo Nakao Executive Vice President, Representative Director
2. Reason for resignations As our announcement today on the Report to the Ministry of Land, Infrastructure, Transport and Tourism concerning improper conduct in fuel consumption testing of vehicles manufactured by MMC shows, MMC has caused tremendous trouble and concern to our customers and all of our stakeholders. Considering this, Mr. Aikawa and Mr. Nakao decided today that they will resign as Representative Directors as of June 24, 2016.
3. Date of resignation June 24 (the day of MMC's ordinary shareholders meeting)
We will decide on the successors of both Representative Directors at our board of directors' meeting and make an announcement promptly
From rumor to reality, Nissan is the largest shareholder in Mitsubishi
In under 24 hours, the rumor has become reality. Nissan will acquire 34 percent of Mitsubishi Motors for 237 billion yen (about $2.17 billion). This makes Nissan the single-largest shareholder in the automaker.
Speaking at a press briefing announcing the deal, Nissan CEO Carlos Ghosn said this alliance will cover purchasing, common platforms, joint manufacturing, technology development, and target shared cost savings. The alliance will also contribute management expertise to help Mitsubishi regain public trust.
“It represents a win-win. We believe in the potential of Mitsubishi Motors,” said Ghosn.
In statements from the two companies, an agreement will be signed by May 25th where Nissan can name four directors to the Mitsubishi Motors board. Nissan can also name one of their directors as a chairman for Mitsubishi.
Osamu Masuko, chairman of Mitsubishi Motors explained the two companies have been discussing ways to extend their partnership for some time. Mitsubishi and Nissan currently have a deal concerning minicars. When the scandal came to light, the talks accelerated.
“We had to do something quite daring. It is not an easy task to restore trust,” said Masuko.
Makuko also notes that a takeover like this would have happened sooner or later due to Mitsubishi lacking the resources to compete effectively on its own.
“This would have happened one day,” he said.
This deal does open Nissan to possible issues concerning the problems facing Mitsubishi and how much money will need to be spent. Ghosn explained that Mitsubishi was very open about the scale of problems it faces and that Nissan would only complete the deal after it has done an investigation into the investment.
Source: Automotive News (Subscription Required), New York Times, Mitsubishi, Nissan
Press Release is on Page 2
Nissan and Mitsubishi Motors forge strategic alliance; Nissan to take 34% stake in Mitsubishi Motors for 237 billion yen
YOKOHAMA and TOKYO, Japan – Nissan Motor Co., Ltd., (“Nissan”), and Mitsubishi Motors Corporation, (“MMC”) announced that they have signed a Basic Agreement today to form a far-reaching strategic alliance between the two Japanese automakers.
Following an MMC share issue, Nissan will take a 34 percent equity stake in MMC for 237 billion yen.
The strategic alliance will extend an existing partnership between Nissan and MMC, under which the two companies have jointly collaborated for the past five years.
Nissan and MMC have agreed to cooperate in areas including purchasing, common vehicle platforms, technology-sharing, joint plant utilization and growth markets.
Carlos Ghosn, chief executive and president of Nissan, said: “This is a breakthrough transaction and a win-win for both Nissan and Mitsubishi Motors. It creates a dynamic new force in the automotive industry that will cooperate intensively, and generate sizeable synergies. We will be the largest shareholder of MMC, respecting their brand, their history and boosting their growth prospects. We will support MMC as they address their challenges and welcome them as the newest member of our enlarged Alliance family.”
Osamu Masuko, chairman of the board and chief executive of MMC, said: “Through its long history of successful partnerships Nissan Motor has developed a deep knowledge of maximizing the benefits from alliance partnerships. This agreement will create long-term value needed for our two companies to progress towards the future. We will achieve long term value through deepening our strategic partnership including sharing resources such as development, as well as joint procurement.”
Under the terms of the transaction, Nissan will purchase 506.6 million newly issued MMC shares at a price of 468.52 yen per share. The price per share reflects the volume weighted average price over the period between April 21, 2016 and including May 11, 2016. Nissan will become the largest shareholder of MMC on closing.
MMC and Nissan expect Mitsubishi Heavy Industries, Mitsubishi Corporation and The Bank of Tokyo – Mitsubishi UFJ to maintain a significant collective ownership stake in Mitsubishi Motors, and to support the strategic alliance.
The transaction is subject to the signing of a definitive Alliance Agreement, expected by the end of May 2016, the signing of a shareholders agreement with the current Mitsubishi Group shareholders of MMC and regulatory approvals. It is expected to close by the end of the year.
The decision by Nissan to acquire a strategic stake in MMC marks the latest expansion of its Alliance model, built around a 17-year cross shareholding arrangement with Renault. Nissan has also acquired stakes or signed partnerships with other automotive groups including Daimler, and AvtoVaz.
On closing, MMC will propose Nissan nominees as board directors in proportion to Nissan’s voting rights, including a Nissan nominee to become Chairman of the Board.
From left field: Nissan is purported to take a controlling stake in Mitsubishi Motors
We weren't expecting this: Nissan, the automaker who discovered the manipulation of fuel economy figures at Mitsubishi Motors, is currently in the final stages of buying a controlling stake into the company.
According to reports from NHK and the Nikkei Asian Review, Nissan will spend roughly 200 billion Yen (about $1.8 billion) to acquire over 30 percent interest in Mitsubishi Motors. This would make Nissan the largest shareholder in the company, surpassing Mitsubishi Heavy Industries, which currently has a 20 percent stake.
This news comes after Mitsubishi announced that all of its models sold in Japan since 1991 may have inflated fuel economy numbers. Since the scandal came to light, shares in Mitsubishi Motors have dropped 43 percent. Sales of Mitsubishi vehicles in Japan have also taken a turn for the worse. Mitsubishi Motors says they have enough money to cover the scandal and will not seek help from Mitsubishi group companies.
Why would Nissan want a controlling stake in Mitsubishi? A couple of reasons. One, Mitsubishi vehicles are very popular in markets such as Thailand and Indonesia. In fact, Asia makes 50 percent of the company's group operating profit. There is also talk about the two cooperating on electric vehicles.
Both companies will hold board meetings tomorrow to discuss the capital tie-up and how the shares will be distributed.
Source: Bloomberg, NHK, Nikkei Asian Review
UPDATE: Both Mitsubishi and Nissan confirmed they are in talks this morning in Japan.
"Nissan and Mitsubishi are discussing various matters including capital cooperation, but nothing has been decided," according to statements released by both companies.
Reuters confirms that the board of both companies will be holding separate meetings today to discuss this issue.
The past few days have been a whirlwind for Mitsubishi. Here is the latest.
The past couple days have been crazy at Mitsubishi with executives possibly stepping down, the EPA ordering retest of vehicles, and the U.S. branch telling dealers there are no inconsistencies in the tests for the U.S. models. Let's get you up to date.
On Tuesday, the Environmental Protection Agency (EPA) and California Air Resources Board (CARB) requested details from Mitsubishi on its U.S. vehicle lineup to check for discrepancies. The EPA also requested Mitsubishi to retest their U.S. lineup.
A day later, Japanese media reported that Mitsubishi Motors CEO Osamu Masuko and COO Tetsuro Aikawa would resign due to manipulation of fuel economy data. According to Reuters, Aikawa denied these reports.
"It's my responsibility and my mission to put the company on track to recovery. Beyond that, I haven't had a chance to even consider" the possibility of resigning, Aikawa said.
Reuters also reports that Mitsubishi Motors could be on the hook for almost $1 billion to compensate owners, pay back tax rebates from the government, and other payments. This is according to analysts at Nomura Holdings.
Yesterday, Mitsubishi Motors North America said they found no testing problems with vehicles sold in the U.S. between 2013 to now.
“Our findings confirm that fuel economy testing data for these U.S. market vehicles is accurate and complies with established EPA procedures,” Don Swearingen, COO of Mitsubishi Motors North America told dealers in a letter to dealers. The letter was obtained by Automotive News.
Mitsubishi Motors North America Statement Regarding Fuel Consumption Testing Data
April 27, 2016
Mitsubishi Motors Corporation in Tokyo recently announced irregularities concerning fuel consumption testing data.
To confirm that U.S. market vehicles are not affected by this issue, Mitsubishi Motors R&D America, Inc., working together with Mitsubishi Motors Corporation, proactively conducted an internal audit of U.S. market vehicles going back several model years to check previously submitted data to the EPA. After a thorough review of all 2013MY – 2017MY vehicles sold in the United States, we have determined that none of these vehicles are affected. Our findings confirm that fuel economy testing data for these U.S. market vehicles is accurate and complies with established EPA procedures.
An entirely different system is used for the United States market to determine what the EPA calls Road Load Coefficient, strictly adhering to EPA procedures. The data generated is then independently verified for its accuracy before being submitted to the EPA for their fuel economy testing. MMNA has shared this information with EPA, California Air Resources Board and DOT.
Mitsubishi Motors Corporation has acted quickly to address this issue and is putting in place a committee of external experts to thoroughly and objectively continue this investigation. The results of the investigation, once completed, will be made public.
Mitsubishi Motors Corporation is also working closely with the Japanese Government to fully review the implications of this issue, and to discuss potential resolutions.
Mitsubishi's manipulation of fuel economy numbers goes further than anyone expected
Last week, Mitsubishi admitted that it had manipulated fuel economy figures for 625,000 vehicles sold in Japan. But today, the scandal has only grown as the Japanese automaker revealed that it used fuel economy testing methods that were not compliant with Japanese regulations since 1991.
Reuters reports that Mitsubishi was compiling data for fuel economy tests using U.S. standards ( focuses on higher-speed, highway driving) and not Japanese standards (focuses more on city driving).
Since Mitsubishi has come clean about the manipulation last week, the company has lost half of its market value (about $3.9 billion). This has also brought back memories of a scandal Mitsubishi Motors was embroiled in fifteen years ago with covering up customer complaints and vehicle defects for more than 20 years.
Last week, Japanese authorities raided one of Mitsubishi's R&D offices. The Japanese Government has also asked Mitsubishi to submit a report on the manipulation by tomorrow. Meanwhile, U.S. regulators are pressing Mitsubishi to see if any vehicles sold here were involved in the manipulation.
Mitsubishi announced that it has brought in three lawyers to conduct an investigation into the scandal. A report is expected in three months.
Source: BBC News, Reuters, Mitsubishi
Press Release is on Page 2
Tokyo, April 26, 2016
Regarding the Report to MLIT Concerning Improper Conduct in Fuel Consumption Testing of Vehicles Manufactured by Mitsubishi Motors Corporation
The following is a summary of the report submitted by Mitsubishi Motors Corporation (MMC) to the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) today, pursuant to instructions received from MLIT on April 20 to investigate improper conduct in fuel consumption testing of vehicles manufactured by MMC.
1.Background to the improper conduct of MMC mini-car fuel consumption testing data
(1) Four grades of the model year 2014 eK Wagon and Dayz (submitted in February 2013) were produced—a fuel-economy grade, a standard grade, a turbo grade and a 4WD grade. During development of the fuel-economy grade, the fuel consumption target, which had initially been 26.4km/l (in February 2011), was revised upward over a series of internal meetings until finally being set at 29.2km/l (February 2013). (2) Driving resistance data were obtained for that fuel-economy grade using a "high-speed coasting test," which differed from the coasting test required by the applicable laws and regulations in Japan. A relatively low value was selected from among the test results for use as the driving resistance value in order to give the appearance of greater fuel consumption. Data for the remaining three grades were calculated without testing based on the data for the fuel-economy grade. (3) The data submitted for the model year 2014 eK Space and Dayz Roox (submitted in October 2013), the model year 2015 eK Wagon and Dayz (submitted in March 2014), the model year 2015 eK Space and Dayz Roox (submitted in December 2014), and the model year 2016 eK Wagon and Dayz (submitted in June 2015) were all calculated without testing based on the data for the model year 2014 eK Wagon and Dayz to achieve the fuel consumption targets.
2. The following is the timeline leading up to the use of the "high-speed coasting test" differing from the test required by the applicable laws and regulations in Japan. We are currently investigating the reasoning behind each of the decisions outlined below.
(1) In 1991, the coasting test was designated as the method for testing driving resistance under the Road Transport Vehicle Act, but MMC began testing vehicles for the Japanese market using a different method, the "high-speed coasting test". (2) In January 1992, a method was developed to reverse-calculate coasting time using driving resistance. (3) In January 2001, a test was run that compared the coasting test to the "high-speed coasting test," and the difference in results was found never to exceed 2.3%. (4) In February 2007, the testing manual was updated to add that "TRIAS (i.e., the coasting test) is to be used for DOM (i.e., vehicles for sale in Japan)." Nevertheless, the "high-speed coasting test" continued to be used thereafter.
3. Future direction of investigations
(1) While some progress has been made in investigating the events described in sections 1 and 2 above, we will continue to work to discover the causes of this improper conduct and who is responsible. (2) Sufficient investigation has not been made into MMC vehicles other than the mini-cars described above; we plan to submit a separate report after looking into those models.
Establishment of Special Investigation Committee
In connection with the certification process for the mini-cars manufactured by Mitsubishi Motors Corporation ("MMC"), MMC hereby notifies that, yesterday, the board of directors decided to establish a special investigation committee (the "Committee") consisting of only external experts. MMC expresses its most sincere apologies to all of our customers, shareholders, and stakeholders for any inconvenience or concern caused by this occasion.
1: Background for the establishment of the Committee
As announced, on April 20, 2016, in the press release titled "Improper conduct in fuel consumption testing on products manufactured by Mitsubishi Motors Corporation (MMC)," it has been revealed that, in the certification process for mini-cars manufactured by MMC, with respect to the fuel consumption testing data submitted to the Ministry of Land, Infrastructure, Transport, and Tourism, MMC conducted testing improperly, to present better fuel consumption rates than the actual rates; and that the testing method was also different from the one required by Japanese law (the "Matter"). For the sake of ensuring an objective and thorough investigation into the Matter, MMC has established this Committee in a way such that all members would be external experts independent from MMC.
2: Membership and activities of the Committee
i Membership of the Committee
The Committee is composed of the members, as follows, who have no conflicts of interest with MMC. Therefore, MMC has recognized no factor that would harm the independence and neutrality of the Committee. Further, MMC is considering appointing experts with technical knowledge to participate in the investigation.
Committee Chair: Keiichi WATANABE, Attorney at Law (former Superintending Prosecutor, Tokyo High Prosecutors Office) Committee Member: Yoshiro SAKATA, Attorney at Law Committee Member: Genta YOSHINO, Attorney at Law
The Committee shall perform the following activities pursuant to MMC's delegation.
I Investigation to uncover the facts surrounding the Matter, including review of related documents and data, and interviews with the related people. II Investigation to confirm the existence of other improper conduct similar to the Matter, and uncover the facts, if it does. III Analysis of the cause of the Matter, and a suggestion on measures to prevent recurrence.
3: Schedule moving forward The Committee shall investigate the Matter for about the next three months, and make a report on its results. MMC plans to disclose the report in a timely manner.
Another automaker admits to cheating fuel economy tests
Mitsubishi Motors has admitted today to manipulating fuel economy tests for 625,000 vehicles sold in Japan.
The manipulation involves four kei (small-capacity engines and compact dimensions) cars; Mitsubishi eK Wagon, Mitsubishi eK Space, Nissan Dayz, and Nissan Dayz Roox. Out of the total 625,000 vehicles, the majority of the vehicles are the Nissan models.
"The wrongdoing was intentional. It is clear the falsification was done to make the mileage look better. But why they would resort to fraud to do this is still unclear," said Mitsubishi Motors President Tetsuro Aikawa at a press conference.
According to BBC News, the manipulation was done by adjusting the tire pressures when testing fuel economy on a rolling road. Nissan uncovered the manipulation as they were unable to replicate the fuel economy figures that Mitsubishi got.
"This discovery was made during Nissan’s assessment of data from the current model as part of our development of the next-generation vehicle. We immediately brought the discrepancy to the attention of Mitsubishi, as they are responsible for the development and homologation of the current vehicles. In response to Nissan’s request, Mitsubishi admitted that data had been intentionally manipulated in its fuel economy testing process for certification," Nissan said in a statement.
Both Mitsubishi and Nissan have stopped selling the models and are currently figuring out a compensation for affected owners. Mitsubishi has also announced they will be conducting an investigation into overseas models as their internal investigation showed the manipulation was used on other Mitsubishi products.
"We will investigate why this happened and prevent a recurrence. We will inform our customers. I feel horrible they were given the wrong numbers," Aikawa said.
After the announcement was made, shares in Mitsubishi dropped 15 percent, knocking off about $1.2 billion of the company's market value.
This is another black mark for the Japanese company. For more than a decade, Mitsubishi has been trying to regain confidence from the market after it was revealed the company covered up a number of defects involving axles that could cause the wheels to detach.
“It’s again bad for the company’s image. It’s not the first time for Mitsubishi to have this kind of issue, and this definitely won’t help them rebuild their reputation,” said Seiji Sugiura, an analyst at Tokai Tokyo Research Center to Automotive News.
Improper conduct in fuel consumption testing on products manufactured by Mitsubishi Motors Corporation (MMC)
In connection with the certification process for the mini-cars manufactured by MMC, we found that with respect to the fuel consumption testing data submitted to the Ministry of Land, Infrastructure, Transport and Tourism (MLIT), MMC conducted testing improperly to present better fuel consumption rates than the actual rates; and that the testing method was also different from the one required by Japanese law. We express deep apologies to all of our customers and stakeholders for this issue.
The applicable cars are four mini-car models, two of which are the "eK Wagon" and "eK Space" which have been manufactured by MMC; and the other two are the "Dayz" and "Dayz Roox" which have been manufactured by MMC and supplied to Nissan Motors Corporation (NM) since June 2013. Up until the end of March 2016, MMC has sold 157 thousand units of the eK Wagon and eK Space and supplied 468 thousand units of the Dayz and Dayz Roox to NM.
Since MMC developed the applicable cars and was responsible for obtaining the relevant certifications, MMC conducted fuel consumption testing. In the process of the development for the next generation of mini-car products, NM examined the fuel consumption rates of the applicable cars for NM's reference and found deviations in the figures. NM requested MMC to review the running resistance(*) value set by MMC during tests by MMC. In the course of our internal investigation upon this request, MMC learned of the improper conduct that MMC used the running resistance value for testing which provided more advantageous fuel consumption rates than the actual rates. MMC will sincerely respond to our customers who own and use the applicable cars. (*) running resistance: rolling resistance (mainly generated by tires) and air resistance while vehicles are moving
We have decided to stop production and sales of the applicable cars. NM also has stopped sales of the applicable cars, and MMC and NM will discuss compensation regarding this issue.
During our internal investigation, we have found that the testing method which was different from the one required by Japanese law has been applied to other models manufactured by MMC for the Japanese domestic market.
Taking into account the seriousness of these issues, we will also conduct an investigation into products manufactured for overseas markets.
In order to conduct an investigation into these issues objectively and thoroughly, we plan to set up a committee consisting of only external experts. We will publish the results of our investigation as soon as it is complete.
Mitsubishi's Plan to Get Back Up in the U.S. Involves Crossovers and Electrics
Mitsubishi is playing to its strengths to help it rebound in the U.S. That includes the introduction of three crossovers with electric powertrains.
Mitsubishi CEO Osamu Masuko tells Automotive News the company will channel their limited resources into creating a more compact lineup mostly made up of crossovers and SUVs.
"We are strong in SUVs and four-wheel drives. And that is what we would like to focus on as core models in the U.S. market. We have changed direction. We are going to allocate more resources to the areas where we are strong in the U.S," said Masuko.
This move means we will likely not see a replacement for aging Lancer compact and i-MiEV. Instead, Mitsubishi will introduce a new coupe-styled crossover that will slot in between the Outlander Sport and Outlander in 2017. A redesigned Outlander will arrive in 2018 and a new Outlander Sport will come a year after. Each crossover will come with a gas powertrain and some sort of electrification, whether that be through a plug-in hybrid system or an electric powertrain.
In the meantime, Mitsubishi will introduce "big minor changes" to keep their nameplates fresh. This was first shown at the LA Auto Show with the introduction of the 2016 Outlander Sport and 2017 Mirage. Source: Automotive News (Subscription Required)
The popularity of crossovers with consumers is continuing to rise and Mitsubishi wants to make sure they aren't left behind. Speaking with Automotive News, Mitsubishi CEO Osamu Masuko revealed that the Japanese automaker is working a new five-seat crossover that will slot in between the Outlander and Outlander Sport.
The new crossover will take some styling ideas from the eX concept shown at the Tokyo Motor Show and compete with the likes of the Hyundai Tucson and Kia Sportage. Production is expected to begin in Fall of 2017 with Europe and U.S. being the main markets for this vehicle.
"The Outlander is growing in size, while the Outlander Sport is getting smaller, so it opens a space for the new SUV. We need something to fit in between," said Masuko.
This new crossover will help the plea from U.S. dealers that want something fresh in their lots. It also plays a key role into Mitsubishi's revival plan as the company is using crossovers and SUVs to help with their sales. At the moment, 56 percent of Mitsubishi's total volume in the U.S. is made up of crossovers.
Despite Talks, Mitsubishi Begins Working On The Next-Gen Lancer
Mitsubishi hasn't had the best of luck of trying to find a partner. Back in February, we learned that talks between it and Renault had fallen apart for a new midsize sedan. Mitsubishi shelved those plans and reportedly began talks with Nissan. We also learned that Mitsubishi moved up the replacement for the Lancer.
Now Mitsubishi has begun working on the Lancer replacement in-house while it still looks for a partner.
“We are talking with a potential partner at this time, (but) at the same time we’re doing an internal design of the vehicle. We’re running parallel because we cannot wait any longer to see if a partnership will work out. If it falls through then we’re another year behind,” said Don Swearingen, executive vice president of Mitsubishi Motors North America to Wards Auto.
Swearingen confirmed that Mitsubishi is still in talks with an automaker - many believe to be Nissan. Even if a deal is reached, Swearingen says the model is still 18 to 2 years out.
Additionally, Swearingen confirmed the a midsize sedan from Mitsubishi isn't happening.
“We’ve made the decision that D-segment will not work for us in the U.S. When you do the financial analysis and you look at the amount of money (needed) for advertising (and the amount) most of our competitors are spending on incentives, it doesn’t pencil out to do a partnership.”