TOKYO -- Mitsubishi Motors Corp. CEO Osamu Masuko has brought his carmaker back into the black after years of restructuring. The company notched record profits in the fiscal year ended March 31 and even posted its first regional operating profit in North America in seven years.
Despite double-digit sales growth in the U.S., though, volume remains tiny. Mitsubishi targets U.S. sales of just 93,000 vehicles in the current fiscal year.
Masuko, 66, aims to undergird the fragile rebound by consolidating the lineup around crossovers -- which the company refers to as SUVs -- and electrified vehicles. Mitsubishi also will halt output at the company's Normal, Ill., factory to streamline manufacturing.
Masuko spoke through an interpreter with Asia Editor Hans Greimel at Mitsubishi's headquarters here about changes to the lineup, electrified vehicles, autonomous driving and the U.S. outlook.
Q: What are Mitsubishi's plans for the new crossover nameplate?
A: The next-generation Outlander becomes a little bit bigger. And we are planning to make the next Outlander Sport a little smaller. So the gap between them will be expanded, and that's where we are planning to introduce the new SUV. So while we have two SUV models now, we will have three in the near future.
When does the next Outlander Sport arrive?
The next Outlander Sport comes in 2019. That's because the new SUV is planned for 2017. The Outlander Sport is 2019, and the next Outlander is around the same time.
So those next generations won't arrive for another four years?
But we are planning big minor-model changes to enhance the product power. We also have the Outlander PHEV plug-in hybrid, and we are planning a plug-in version of the new SUV model. And currently, we are planning to make this (points to Outlander Sport) in an all-electric variant as well. That's one reason we pushed it a little further into the future.
What about a successor to the full-size Pajero (Montero) SUV?
We have a big question mark as to whether a large-size SUV can meet emissions requirements. We'll still keep manufacturing [the current version]. If we were to sell the Pajero, we would have to compensate by selling more EVs or other environmentally friendly cars. A next-generation Pajero model is not planned.
Has Mitsubishi given up on midsize sedans?
Our resources are not adequate to develop a sedan of our own. We considered getting it supplied on an OEM basis from another maker. But so far, we haven't landed any deal. Even if we can't develop a sedan by ourselves, we are trying to find another way to do it before we decide to give it up.
Is Mitsubishi in talks?
No. We do not have any potential partners yet.
Is Mitsubishi planning a successor to the i electric vehicle?
Looking at sales volume, I think it's difficult to make a dedicated electric vehicle feasible. For example, there will be an electric minicar in the future in Japan. But that will have a gasoline version in addition to the EV.
The Outlander Sport will also get an EV, plus other drivetrains. We are not planning to develop a dedicated EV model.
What about an electrified version of the Mirage or its sedan?
These two models already have very good fuel efficiency. Therefore, that should be enough for the market.
How do you plan to improve U.S. sales?
To our regret, we are going to end production at our U.S. plant. But it's a misconception to think this means we don't put importance on the U.S. market.
The size of the U.S. auto market is on the order of China's. The U.S. is a cutting-edge car market. There is much we can learn from being there.
In the past, our strategy didn't work. Having a plant there and producing multiple models was not right for a manufacturer our size.
Now we are focusing on a narrow model range of mainly SUVs, the Outlander, Outlander Sport and Mirage. From that, we are seeing some fruit. We'd like to keep a viable business in the U.S. market. This year, we saw double-digit growth in the U.S. market. Overall, the U.S. market is improving for us.
Why did you consolidate the lineup?
Looking at our past lineup -- with the Galant, Endeavor, Eclipse, Eclipse Spyder -- I can't see any consistency.
We are strong in SUVs and four-wheel drives. And that is what we would like to focus on as core models in the U.S. market. We have changed direction. We are going to allocate more resources to the areas where we are strong in the U.S. SUVs and environmentally friendly technologies are the two keys.
What is the outlook for next year?
We'd like to target double-digit growth next year, too. In mid-2016, the Outlander PHEV plug-in hybrid will arrive in the U.S.
We will also open a new office in Silicon Valley in January and send two Japanese employees there. I visited Silicon Valley in May and met many people. I felt a very strong energy there. I thought it would be good to send a younger generation of employees to learn from them.
They will report to Tokyo headquarters on such matters as autonomous driving, artificial intelligence, environmental technologies or new business schemes.
Mitsubishi also is expanding in Washington, right?
We are going to send Japanese ex-pats to our office in Washington, D.C. We already have an office, but we have sent no Japanese employees to work there.
They will gather information more effectively and coordinate with the Silicon Valley office to sense the latest directions of the U.S. market.
What is Mitsubishi's vision for autonomous driving?
In general, automakers believe cars should still have a steering wheel to maintain driving pleasure. But they should pursue autonomous driving for its advanced safety features.
That is our understanding at Mitsubishi.
The high-tech sector says drivers shouldn't have to do anything; the car will just bring you to your destination. That is not what we are trying to develop as an automaker.
What kind of technologies does Mitsubishi plan by 2020?
Automatic parking assist should be fine. And automated highway driving should be available. I don't think that's too difficult.
And 100 percent autonomous driving should also be possible in limited areas, such as on the premises of factories.
What happens next with the Normal plant?
We will stop car production, but we will need to continue producing replacement parts and components. Therefore, the plant will continue running until May next year or so.
We tried hard to find a buyer, ideally an automaker, and we searched really hard, being supported by the Illinois government and the United Auto Workers. But so far, we haven't found anyone. But we haven't given up looking with their support.