TOKYO -- When President Osamu Masuko took the helm of Mitsubishi in 2005, the company was still being battered by years of losses. He steered the automaker to a record operating profit just last year, but now the global financial crisis is threatening this turnaround.
Masuko knows that rolling out more small, fuel-efficient cars with worldwide appeal is the best way to weather the storm, but how to deliver the right model mix globally is one of his enduring problems.
Masuko, 59, talked through an interpreter with Automotive News Europes Asia editor, Hans Greimel, about his outlook for the global economy, the companys plans for electric vehicles and for its current model lineup.
These are tough times for the entire industry. What is Mitsubishis current outlook?
With regards to the first six months, we have reached our target and we are very happy. But as for the environment, its becoming very difficult and the second half will be very tough.
So what we have to do for a while is to keep going. Whats important for us is that there will be a gradual economic recovery, so we have to be prepared for that.
How is Mitsubishis Step Up 2010 mid-term business plan being affected by the sudden downshift in the global economy? You had been hoping to double net income in three years. But you have already downgraded your earnings forecasts for this fiscal year.
We need not change the positioning of Step Up 2010. We have to accept the fact that the economic environment is changing dramatically. The biggest factor of change will be foreign exchange, so our business model has to be very flexible.
We have been exporting to Europe from Japan because there was a cost advantage in the past. But that might not be the case in future because of the depreciation of the euro towards the yen.
So maybe we have to buy from somewhere else and not export from Japan to Europe.
So the strategy remains the same, but what about the numerical targets?
We might know where the global economy is heading after Western companies issue their full-year results at the end of December. So maybe at that time, we can review what we have been doing and think about how to proceed. But now is not the time to make decisions.
Your i MiEV electric vehicle goes on sale next summer in Japan. What can you tell us about its sales targets there and its debut elsewhere?
In Japan for the fiscal year 2009, our target is 2,000 units. At the same time, we will conduct driving verification tests in the United States and Europe, as well as in Singapore and New Zealand.
A left-hand drive vehicle will be introduced in the summer of 2010, so we will be able to export a left-hand drive version after that.
Our sales volume plan for 2010 is 4,000 units, and from 2011 onward its about 8,000 to 10,000 units, globally. The first 2,000 units will be almost entirely from Japan. As for the United States, we havent decided on the sales timing, but it will happen after we start left-hand drives.
What kind of global demand do you forecast for electric vehicles?
When our electric vehicle debuts next summer and people see it running around the city, it will receive a lot of attention. Theres no noise, no smell, no emissions. When you think about the entire industry, its not difficult to imagine 10 percent to 20 percent of cars being electric.
But we have to think about the mass production of batteries. It will take time for manufacturers to ramp up production, so it may be around 2020 before we have fully established facilities.
What other kinds of electric vehicle models does Mitsubishi have in the works?
We are currently also developing an electric vehicle for commercial use, for delivery, cargo, luggage or transport. We expect volumes to keep growing by catering to these commercial needs.
We have not shown this commercial vehicle yet but we would like to do so in the very near future. We intend to take this worldwide. Theres a global need for commercial vehicles for small shops and delivering mail or packages.
Is the commercial vehicle based on the i MiEV?
Yes, its the same platform, only the body is different. We could launch it in the same time frame as the i MiEV but there is one problem.
We said we will sell 2,000 electric vehicles next year, but this is due to the capacity of battery production. But already we have a lot of inquiries about the electric car, so I dont know how much we would be able to allocate to the commercial vehicle.
So first were going to concentrate on the i MiEV, but in the longer term we have to respond to the needs of customers who want to go longer distances. So we will have to install this system in bigger vehicles. If we think about that, it means a plug-in hybrid is necessary. The motor, inverter and battery are the three key components, so we have to think about how to achieve this.
What are your plans for plug-in hybrids?
I think there are two ways of getting to plug-in hybrids. One is from hybrids into plug-ins, but what we are doing is jumping from electric vehicles directly to plug-in hybrids. Were not going to take the interim step of hybrid vehicles.
Our image of a plug-in hybrid is very close to that of an electric vehicle. The purpose of the engine is to provide power for the battery. So when you talk about the hybrid vehicle running, its actually running on batteries and motors.
We have to further develop the electric vehicle base before expanding into plug-in hybrids, but we will be developing plug-ins in parallel with electric vehicles.
Are you thinking about introducing new vehicles to tap the demand for small cars?
The criterion will be if its a vehicle that can be sold on the global market. We dont have any concept of strategic regional vehicles.
We have done away with that, and were trying to produce global vehicles. As for manufacturing in the United States, any vehicle made there should not be sold in the US alone, it should be a global product.
Do you think 2009 will be worse than 2008?
In terms of a global economic recovery, I think people will start feeling that, not next year, but maybe in 2010.
What does Mitsubishi need to do to meet new mileage and emissions regulations in Europe?
There are lots of solutions we have in mind. We have to think about enhancing gasoline engines, bringing out clean diesels and biofuel. You also have to do electric vehicles.
We have to accept this as an opportunity. When people run into these difficult challenges, they can generate new ideas that lead to technological innovation.
What do you think of the US governments guaranteed bailout loans to American car companies? Do you think its fair?
Let me first say, a few years ago we were in a very difficult situation as a company, but we have recovered to this level without any support from the government. But I sincerely hope these three American manufacturers will recover soon.
I dont think its unfair for the government to support them. It will probably be short-term, not long-term. I think its a good idea.
How worried are you about a backlash against Japanese automakers if one of your American rivals goes bankrupt?
In the past, Japanese companies were criticized for their market share in America, and one had to engage in self regulation. But the economy is a market economy.
People should be allowed to compete freely, otherwise we wont have healthy companies and customers will also suffer.
Does Mitsubishi have any plans to apply for the emergency loans?
We dont have plans to do that.