Mitsubishi
Mitsubishi Motors Corporation is a multinational automotive manufacturer headquartered in Tokyo, Japan. In 2011, Mitsubishi was the number six Japanese automaker and the sixteenth biggest worldwide. It formed in 1970 from the automotive division of Mitsubishi Heavy Industries.
Mitsubishi’s automotive history began in 1917 with the Mitsubishi Model A, Japan’s first series-production automobile. Entirely hand-built, it was expensive compared to American and European mass-production competition and disappeared in 1921 with only 22 built.
In 1934, Mitsubishi Shipbuilding merged with the Mitsubishi Aircraft Company and formed Mitsubishi Heavy Industries, the largest private company in Japan. In 1937 it developed the PX33, a prototype sedan, for military use. It was the first Japanese-built passenger car with four-wheel drive, technology to which the company would return almost 50 years later for motorsport purposes.
By the 1960s, the Japanese economy was gaining steam; incomes rose and family motoring took off. The Mitsubishi 500, a sedan for this emerging mass market, launched to meet the demand. Within three years Mitsubishi’s annual output was 75,000+ vehicles. Following the successful introduction of the first Galant in 1969 and similar growth with its commercial vehicles, the company decided to form Mitsubishi Motors Corporation in April 1970 as a Mitsubishi Heavy Industries subsidiary.
In 1971 Mitsubishi sold Chrysler a 15-percent share in the new company, and Chrysler began to sell the Galant in the USA as the Dodge Colt, the first rebadged Mitsubishi sold by Chrysler, pushing Mitsubishi’s annual production past 250,000 vehicles. By 1977, Europe had a network of distribution and sales dealers as annual production grew from 500,000 vehicles in 1973 to 965,000 in 1978, when Chrysler began to sell the Galant as the Dodge Challenger and the Plymouth Sapporo. Mitsubishi finally achieved annual production of one million cars in 1980, but all was not well with its Chrysler ally. To avoid bankruptcy, Chrysler had to sell its Australian manufacturing division to Mitsubishi that year.
In 1982, Mitsubishi entered the American market for the first time with the Tredia sedan and the Cordia and Starion coupes. By the end of the 1980s, Mitsubishi made a major push to increase its American market presence by a national television advertising campaign and an extension of its dealer network.
Mitsubishi Motors went public in 1988, ending its distinction as the sole privately-held Japanese auto manufacturer. Mitsubishi Heavy Industries reduced its stake to 25 percent while Chrysler divested all its Mitsubishi shares by 1993.
The southeast Asia economic crisis began in 1991 with the collapse of the Japanese asset price bubble and continued to 1997. Mitsubishi sales in Japan slowed considerably throughout 1997 into 1998. Other Japanese automakers offset slipping domestic sales with success in the USA; however, with a smaller percentage of the American market, Mitsubishi fared far worse in the turmoil in the Asian economy. It lost its rank as third largest Japanese automaker to Mazda, it lost market shares overseas, and its stock price plummeted.
In what was one of the worst scandals in Japanese corporate history, Mitsubishi admitted to concealing failing brakes, fuel leaks, and malfunctioning clutches in its vehicles. The catastrophe forced the company to recall 163,707 cars for corrective repair.
In an effort to boost USA sales, Mitsubishi offered “0–0–0” financing: 0% down, 0% interest, and $0 monthly payments for 12 months. Sales jumped up, but at the end of the year numerous credit-risky buyers defaulted, leaving Mitsubishi with used vehicles worth less than they cost to build. USA sales fell to 243,000 in 2003, 139,000 in 2004, 124,000 in 2005, and 119,000 in 2006. With $287 million in European operating losses due to stagnant sales in a continent beset by a debt crisis, Mitsubishi in February 2012 decided to withdraw production from Europe.
