OKAZAKI, Japan - During Japan's Golden Week holidays in early May 2004, Tetsuro Aikawa placed an urgent phone call to Hiroshi Fujii with a seemingly impossible request.
Aikawa, who would later become Mitsubishi Motors Corp.'s managing director in charge of product development, asked Fujii to come up with a cost estimate for developing and launching a low-volume station wagon version of Mitsubishi's iconic Lancer Evolution high-performance sedan. The car would be for sale in Japan only.
Aikawa wanted the estimate in two days. Normally, that process takes six months.
What happened next was important for companies beyond Mitsubishi. Developing new cars fast is an enormous competitive advantage for Japanese carmakers. Their ability to move quickly enables them to react to swings in the market and, as the Mitsubishi case shows, changes in their own circumstances. It is a skill that U.S. carmakers are struggling to master.
The timing was crucial.
Just a few days earlier, on April 23, 2004, DaimlerChrysler AG had shocked Mitsubishi when it decided to pull out of their alliance. Outsiders questioned Mitsubishi's very survival.
Suddenly, Mitsubishi's entire future product plans were up in the air.
Aikawa was determined to prove that Mitsubishi had a future. The way to do it, he decided, was to come up with a new car - fast. A new version of the Evo - its nickname among enthusiasts - also would demonstrate that Mitsubishi could draw from its own heritage as it charted a new course.
Enter 'Dr. Evo'
Fujii was the project manager for the Evo VII launched in February 2001. In the road-rally fraternity, Fujii's nickname was "Dr. Evo."
Aikawa, who owned an Evo VII, knew that Fujii had done some preliminary investigations into an Evo wagon three years earlier at Mitsubishi's development center in Okazaki, east of the central-Japan city of Nagoya. Mitsubishi's top management, then in the midst of a restructuring, was not convinced that the proposed car would sell at a reasonable return.
Aikawa set only one requirement. Fujii's proposal would have to be profitable. The car would prove Mitsubishi had a future only if the car could make money. Meanwhile, Aikawa also asked the sales department for volume estimates.
Neither man cared whether the car would be truly new from an engineering standpoint. It would borrow heavily from the existing Evo and Lancer Wagon.
Aikawa favored using carryover parts from existing models to save money. Because an Evo wagon would extend that nameplate into a new segment, to consumers it would be new.
Fujii contacted his boss, Hideyuki Iwata. Iwata had recently become project manager of Mitsubishi's C-segment product-development project. The suspension specialist had spent 11 years at Mitsubishi's motorsports unit, prepping the Evo and the Pajero SUV for the Paris-to-Dakar Rally and other races.
Fujii and Iwata raced to review existing parts they could use and see what new ones they would need. In two days, Fujii had his estimated budget.
Too high, Aikawa said.
Fujii and Iwata tried again. "The e-mails were just flying," Iwata recalls. Fujii pestered engineers in all departments and the design staff to find ways to reduce the costs. Finally, they got the costs low enough for Aikawa.
Through the quality gate
The second week of May 2004, Aikawa told them they would have about a month to prepare for kickoff around June 10 or 12. By then the team would have to set the key assumptions about volume, cost, target price and so on.
The sales department targeted limited-edition sales of only 2,500 Evo Wagons, all in Japan, by the March 31, 2006, end of Japan's fiscal year. Serious engineering then would begin ahead of the top-management review known within the company as "Quality Gate D."
At Mitsubishi, product development can begin as many as 40 months before the Job 1 start of production. More commonly, there are six or seven months between the start of planning, when the company sets ballpark volume and financial targets, and the critical Quality Gate D. At the latter, top management approves the final design freeze and the financial targets.
After a vehicle program passes Quality Gate D, a sprint begins to Job 1. Engineers must release engineering orders, validate parts and production processes, build prototypes and confirm that the vehicle meets quality targets. At Mitsubishi, that takes 13 months for a reskinning or a derivative of an existing model. It takes 21 months for a new or completely re-engineered model.
In the case of the Evo Wagon, the time was reduced to a month and a half. It then took a standard 13 months to move from Quality Gate D in July 2004 to Job 1 in August 2005.
In early June 2004, Aikawa called Iwata. As part of the project kickoff, he insisted Iwata invite the entire development team, including engineering, accounting and design, to see the proposed exterior design study. That would help everyone to understand the project's direction and goal.
Iwata agreed. It was a company-only event. No suppliers came.
"I expected 30, maybe 50 people would come to see the model," he says. "More than 100 people came. Everyone was interested in this project."
Iwata points to a body design document to show the extreme measures taken to bring the car in on budget. On the sheet, seven parts are marked "C/O" for carryover parts from the Lancer Wagon. Other parts are marked as "small modifications," "Evo base" and "no change." The front doors' exterior panels are from the Evo, and the doors' inner sashes are from the Lancer Wagon.
The one-piece side panel, running from the front fender to the far rear with cutouts for the doors, was a problem. Because of the Evo's wide tread, the design called for a "blister," or a bulging shape, above the rear wheel wells. The Evo Wagon thus could not use the same side panel as the Lancer Wagon. But creating an all-new side panel would take too much time and money.
The engineers first considered cutting off everything behind the front door of the Lancer Wagon's side panel and stamping the rear half separately. But that also was too expensive. Finally, they cut out just the section above the rear wheel. Then they stamped out a replacement piece shaped for the Evo Wagon and welded it into place to complete the side panel.
Lights out: Jan. 2006
Headlamps also were a problem.
The existing Evo and Lancer used high-intensity discharge lamps. A new Japanese law, however, required that any cars built after Jan. 1, 2006, with those lamps had to include headlamp auto-leveling technology.
Mitsubishi was developing that technology for the Lancer, but Iwata eventually conceded that he couldn't install the change in time. Production would have to stop at the end of 2005. That ruled out any sales beyond the limited-edition 2,500 originally planned.
In the end, 95 to 98 percent of the Evo Wagon's parts were carried over from the Lancer Wagon or the Evo IX, which had gone on sale in March 2005.
In general, the new car's platform, suspension and other key underbody parts come from the Evo. So do the engine, transmission, transaxle, Bilstein shock absorbers and Brembo brakes.
The body is mostly from the Lancer Wagon. Mitsubishi uses 250 additional welds on the cross members and where the side pillars meet the roof to improve the station wagon's rigidity.
Iwata won't reveal the full cost of the Evo Wagon program or its profit margins. But he says developing the Evo Wagon from the existing Evo cost only about 30 percent of what Mitsubishi paid to develop the Lancer Wagon from the Lancer sedan. An internal company memo, which Automotive News has seen, says that Mitsubishi makes as much profit on one Evo Wagon as it makes from four eK Wagon minivehicles.
The Lancer Evolution Wagon went on sale in Japan on Sept. 7, 2005. It was priced at ¥3.41 million, or about $28,850 at current exchange rates. That is less than the Evo IX's $30,180.
Interest was high even before then, says Masahiro Yoshida, a salesman at the Katsushika outlet of Tokyo Mitsubishi Auto Sales.
By the end of February, Mitsubishi had sold 2,000 of the 2,500 Evo Wagons built.
Says Yoshida: "The wagon has become a topic of conversation. I think it is a success."