Mitsubishi chief: Automaker's growth starts now
TOKYO -- President Osamu Masuko has led a rebounding Mitsubishi Motors Corp. to record net income after years of restructuring. Last month, he launched a three-year business plan, dubbed New Stage 2016, that aims to boost global sales 29 percent to 1.43 million vehicles and North American sales by more than a third to 150,000.
Key to the plan is returning to Mitsubishi's traditional strength in SUVs and crossovers and focusing on electrified drive-trains. Mitsubishi also entered an agreement with the Nissan-Renault Alliance to cooperate on sedans, small cars and electric vehicles.
Masuko, 64, also pledges to keep selling in the United States and to look for ways to boost output at the company's North American assembly plant in Normal, Ill.
Masuko spoke through an interpreter with Asia Editor Hans Greimel.
Q. How solid is your recovery at Mitsubishi?
A. We are finally starting to see the fruits of the seeds we have planted. We're delivering a profit. This year, we laid the foundation for paying a dividend next year.
When I took office in 2005, I don't think there were many people who had confidence that a turnaround would come. Until now, we have faced lots of constraints. But these constraints are falling away. The growth starts from now, I believe.
What keeps you up at night when it comes to North America?
Right now, we are struggling with our U.S. operations. But as one of the developed economies, the U.S. has very large total demand. And it's one of the few developed economies in which demand is actually increasing. It is very important for us to do business there. We want to rebuild and improve our business.
You won't pull out or close your U.S. plant?
No. Last year, we started the reforms. We stopped producing old models and we started producing as well as exporting new models, such as the Outlander Sport. We are making full use of [our plant's] capacity. We have a full turnaround in the United States.
There is no way we are going to withdraw from the U.S. market.
When can you beat your 2002 record U.S. sales of 345,111?
We sold a lot at our peak. To achieve that level again would be very difficult. But with new products, including the Mirage from this year and the Outlander plug-in hybrid from 2015, we'd like to grow as much as possible.
What are the risks going forward?
We want to balance the production footprint across developed and emerging markets. We have production in Japan and the United States. But in the future, there are going to be foreign exchange issues as well as declines in some emerging markets. To hedge against such fluctuations, we need production in developed and developing countries.
You want North American sales of 150,000 in the fiscal year ending March 31, 2017, up from around 110,000 this fiscal year. Is that too conservative?
The breakdown of this 150,000 would be 100,000 in the United States and 50,000 for Canada and Mexico. This may be conservative. The Mexican market will grow more quickly than expected. What we don't want to do is give a big number and not accomplish it.
How will you leverage the Nissan-Renault tie-up to deliver a successor for a D-segment Galant or C-segment Lancer sedan?
We have just started to consider that. We'd like to have a decision as soon as possible.
In the D segment, we're considering platform sharing. But it might be difficult to do rebadging [of C-segment sedans] because the markets would include China and Russia, and you need local production there. So a rebadging is not really realistic. The D segment is not that big of a segment for us, so I think rebadging is OK. The level of complexity increases a lot with the C segment. If it doesn't work, we may have to do it alone.
What are your plans for plug-in hybrids?
We have the plug-in version of the Outlander and a plug-in version of the Outlander Sport, as shown at the Tokyo Motor Show. There will also be a plug-in Pajero. They aren't stand-alones. Within a nameplate, you will have a gasoline version, the plug-in, maybe a diesel.
One thing I can say for sure is that the plug-in hybrid market will grow. U.S. CAFE standards are becoming more stringent, so you need vehicles like plug-ins to satisfy them.
What about small electric vehicles such as the i-MiEV? Are you working on its successor with Nissan-Renault?
With Nissan and Renault, we're considering producing an all-electric minicar. We want to bring together our experts to bring down battery costs. And as an extension of that, we may consider an EV application in a car bigger than a minicar.
Are you going to do a next-generation i-MiEV?
Regarding the next generation, we're not sure if it would be the same size. It might be better to have a vehicle a little larger.
The problem at the moment is that we're not able to produce enough i-MiEV batteries. But from next April, there will be an increase in the production of batteries for the plug-in hybrids.
Why can't you get enough batteries?
Right now, we want maximum production of the plug-in hybrid, so i-MiEV battery production is being deprioritized. We can make only 30,000 plug-in vehicles this year. But from next April, battery output should increase to just over 5,000 units a month, and that means about 60,000 units annually for the plug-in. By then, we will have shifted battery production for the i-MiEV to a different plant.
Your new business plan prioritizes SUVs and crossovers. What happened to Mitsubishi's sporty cars such as the Eclipse or the Lancer Evolution?
When you look at the global ranking of top-selling Mitsubishi vehicles, at the top are pickups, then the Pajero and Pajero Sport and then the Outlander and Outlander Sport. We want to further enhance our strong suits. That will better secure the future of our brand. This is a simple strategy of back to basics.
We have produced sports cars in the past. But we have to prioritize. When you consider Mitsubishi's size and management resources, we can't do everything on our own.
Will you bring the Pajero SUV to the United States?
We would like to bring the next-generation version that we are developing, partly because it will have a plug-in hybrid version.
And you want to bring the plug-in version?
That's right. A plug-in hybrid Pajero.
You are one of the longest-serving Japanese automaker CEOs. Is there a goal you want to reach before you say your mission is accomplished?
I became president in January 2005. Before me, there was on average nine different presidents over nine years. The employees wondered at the time, "Can you perform like Mr. Ghosn?" I said, "Impossible. I don't have the charisma."
Then the employees said try to stay as long as possible. It was not a good thing for the employees to have nine presidents in nine years. But it was beyond my imagination I'd end up serving as president this long.
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