Mitsubishi Motors North America

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Mitsubishi Motors North America
Type Subsidiary
Founded 1981
Headquarters 6400 Katella Avenue, Cypress, California, 90630-0064
Key people Hideyasu Tagaya (Chairman)
Hiroshi Harunari (President, CEO)
Dan Booth (EVP, CFO)
Products Automobile manufacturing, finance, R&D
Parent Mitsubishi Motors (100%)
Subsidiaries Mitsubishi Motors Credit of America, Inc. (MMCA)
Mitsubishi Motors R&D of America, Inc. (MRDA)
Mitsubishi Motor Sales of Canada, Inc. (MMSCAN)[1]
Website Mitsubishicars.com

Mitsubishi Motors North America, Inc. is the North American operation of Mitsubishi Motors Corporation, overseeing sales, manufacturing, finance, and research and development functions. The company manufactures and sells Mitsubishi brand cars and sport utility vehicles through a network of almost 700 dealers in the United States, Canada, Mexico, and the Caribbean.[2][3][4]

It operates its administrative headquarters in Cypress, California. Also based there are its captive finance subsidiary Mitsubishi Motors Credit of America, Inc. (MMCA), established in 1991. Mitsubishi Motors R&D of America, Inc. (MRDA) also has its Californian Research and Design Center there, while the R&D head office is in Ann Arbor, Michigan.

MMNA's sole production facility, formerly known as Diamond-Star Motors and then Mitsubishi Motor Manufacturing of America, is based in Normal, Illinois, where 1,900 workers are employed building the Outlander Sport model.

History[edit]

MMNA was formed in 1981 after tensions arose between Mitsubishi and its then U.S. import partner, the Chrysler Corporation over conflicts in the international subcompact market, leading the ambitious Japanese company to establish its own sales network.[2] The first year's allocation of 30,000 vehicles in 1982 were the $6,500 Tredia sedan, and the $7,000 Cordia and $12,000 Starion coupes, followed shortly by the Mighty Max pickup truck, and were sold through 70 dealers in 22 states.[2]

The Diamond-Star Motors joint venture with Chrysler in Normal, Illinois began in 1985, as American-built cars would not be subject to the same restrictive quotas as vehicles imported from Japan. The company sold 67,000 cars in the United States in 1987, but by the time the new factory came onstream the next year, it offered a capacity of 240,000 vehicles. With this new capacity, Mitsubishi made a fresh push to expand its American operation in 1989, increasing its sales network by 40 percent to 340 dealerships and producing its first nationwide advertising campaign.[2]

Mitsubishi's North American R&D facility in Ann Arbor, Michigan.

1991 was a landmark year for Mitsubishi in the United States. It bought Chrysler's share of Diamond-Star for $100 million, and became the first Japanese owner of a U.S. car rental agency when it purchased Value Rent-a-Car.[5] Sales of Mitsubishi-badged vehicles reached almost 190,000.[2]

The remainder of the 1990s provided both ups and downs for MMNA. The rising yen and a weak global economy caused a drop in production and profits, but it weathered the storm better than its Japanese competitors. However, in 1994 it was the subject of two lawsuits brought against it. The first, filed by 29 women in December 1994, accused the company of fostering a climate of sexual harassment at its Normal, Illinois plant. Then, in April 1996 the Equal Employment Opportunity Commission (EEOC) filed a class action suit on behalf of approximately 300 other women who worked at the plant. Mitsubishi initially denied any problems at its plant but later hired former U.S. Labor Secretary Lynn Morley Martin to recommend changes to its policies and practices. The 1994 suit was settled for $9.5 million in August 1997, and an agreement with the EEOC was reached later that year as well.[6]

Mitsubishi recovered quickly after this, and while its global operations were suffering in the wake of the 1997 East Asian financial crisis, MMNA reported banner results, breaking its sales records every year between 1999 and 2002 and seeing growth of 81 percent to 345,000 vehicles, while the company improved its position in Harbour and Associates' Assembly Productivity Ranking from last to first.[7][8] At this point Mitsubishi was the fastest growing auto brand in the United States.[9]

Troubles began to emerge in 2003. One of the roots of their rapid growth was a "0–0–0" finance offer—zero percent down, zero percent interest, and nothing per month (repayments deferred for 12 months)—aimed at increasing MMNA's annual sales to 500,000 vehicles. However, numerous credit-risky buyers ended up defaulting at the end of the year's "grace period", leaving Mitsubishi with used vehicles for which they'd received no money and which were now worth less than they cost to manufacture.[10][11] The company's American credit operation was forced to make a $454 million provision against its 2003 accounts as a result of these losses.[12]

In the wake of this and other issues sales plummeted, to 243,000 in 2003, 139,000 in 2004, 124,000 in 2005,[1] and 119,000 in 2006.[13] New introductions have had mixed success, with the Outlander and Eclipse models showing sales growth in 2006, but the Endeavor SUV failing to meet expectations. A new Lancer compact car debuted in 2007,[14] and in an effort to exploit unused capacity at its Normal, Illinois plant more export markets for the Galant sedan are being sought..[15]

Production and Sales[edit]

Production[edit]

Year Eclipse/
Eclipse Spyder
Endeavor Galant Chrysler Sebring/
Dodge Stratus
Outlander Sport Total
2000 77,795 - 104,313 40,282 - 222,390
2001 70,565 - 94,820 28,359 - 193,744
2002 75,323 10 100,760 28,140 - 204,233
2003 25,974 49,987 53,455 28,443 - 156,859
2004 10,433 19,448 39,841 28,920 - 98,642
2005 37,399 22,403 29,337 - - 89,139
2006 39,602 18,097 35,541 - 93,240
2007 24,333 13,465 37,729 - 75,527
2008 13,814 2,316 27,747 - 43,877
2009 2,278 5,401 15,017 - 22,696

Sales (Millions of Yen)[edit]

Year United States Canada Mexico Puerto Rico Total
2000 314,417 - - - -
2001 322,393 - - - -
2002 345,111 3,223 - 11,815 360,149
2003 243,592 12,786 6,044 10,490 272,912
2004 139,270 10,900 11,911 12,230 174,311
2005 115,168 10,293 15,568 14,923 155,952
2006 124,508 11,801 16,868 11,046 164,223
2007 124,429 17,790 17,710 11,963 171,892
2008 84,010 18,874 16,100 - 118,984
2009 53,775 20,062 13,805 - 87,642

(sources: Facts & Figures 2005, Facts & Figures 2008, Facts & Figures 2010, Mitsubishi Motors website.
NOTE: Puerto Rico is currently included in Central and South America region, effective from FY2008.)

References[edit]

  1. ^ a b Fact & Figures 2005, Mitsubishi Motors website
  2. ^ a b c d e "Mitsubishi Motors Corporation", Funding Universe
  3. ^ "Mitsubishi Motors North America, Inc. - Sales Division", Mitsubishi Motors North America website
  4. ^ "Mitsubishi Motors North America, Inc. - Overview", Mitsubishi Motors North America website
  5. ^ "If They Rent, They May Buy", TIME Magazine, May 14, 1990
  6. ^ "MMNA and EEOC reach voluntary agreement to settle harassment suit", EEOC press release, June 11, 1998
  7. ^ "Finbarr O'Neill Resigns From Mitsubishi Motors North America Mitsubishi Motors Executive Rich Gilligan Appointed to President and CEO Position", AutoChannel.com, January 4, 2005
  8. ^ "Mitsubishi Motors North America, Inc. - Manufacturing Division", Mitsubishi Motors North America website
  9. ^ "Mitsubishi Motors", University of North Carolina
  10. ^ "Can Mitsubishi Pull out of its Skid?", Brian Bremner and Christopher Palmeri, BusinessWeek, September 29, 2003
  11. ^ "It's the Dealers, Stupid!", Steve Findlay, Ward's Dealer Business, September 1, 2004
  12. ^ "Mitsubishi Motors Announces First-Half FY 2003 Results, Gives Forecast for Full-Year FY 2003" Mitsubishi Motors press release, November 11, 2003
  13. ^ "MMNA sales down 4% in 2006", Scott Miller, The Pantagraph, January 5, 2007
  14. ^ "Mitsubishi Motors to give new Lancer compact sport sedan global premiere at 2007 Detroit Motor Show" Mitsubishi Motors press release, December 11, 2006
  15. ^ "Mitsubishi's turnaround hinges on new models, worker mindset", Yuzo Yamaguchi, The Detroit News, October 31, 2005

External links[edit]