TOKYO - Mitsubishi Motors Corp. will invest nearly $93 million in its Australian operations, in another sign that the carmaker's money-losing factory there may stay open.
Officially, however, the company insisted that no decision has been reached on the fate of the Adelaide factory. 'The correct answer will come in March,' when Mitsubishi will unveil a restructuring plan, spokesman Masayuki Sekino said.
The Japanese parent company will underwrite in full an issue of 172,413,793 new shares in Mitsubishi Motors Australia Ltd. at a cost of Australian $172.4 million. That is about ¥10 billion, or $93 million at current exchange rates.
The share purchase, on Dec. 18, will raise Mitsubishi Motors' stake in the Australian unit to 88 percent from 60 percent. Trading house Mitsubishi Corp.'s stake will decline from 40 percent to 12 percent.
Despite recent reports that the company may be closing its Australian operations, Mitsubishi has taken a number of steps recently that indicate it may not be ready to pull the plug. In June, a new management team was assembled, led by former Toyota Motor Corp. Australia Ltd. executive Tom Phillips.
Phillips believes the investment should end speculation about the unit's fate. 'This funding underwrites Mitsubishi Motors' continued manufacturing in Australia,' he said in a statement. 'We are here for the long haul.'
Mitsubishi said in a statement that the investment comes as a result of 'Mitsubishi Motors Australia's position as a unit vital to the company's business strategy' as an exporter. The company will use some of the money to increase export sales, particularly to the Middle East.
In 2000, Mitsubishi is forecasting its Adelaide plant will build 38,000 cars, including 12,000 for export, while its sales operations will sell 75,000 vehicles, including imports, thus capturing 9.6 percent of the projected Australian market.c
Bloomberg News Service contributed to this report