Mitsubishi

Mitsubishi Motors Corporation (Mitsubishi Jidōsha Kōgyō Kabushiki Kaisha) is part of the Mitsubishi Group, a Japanese conglomerate of industrial and service activities that has been producing cars since 1917.

History

Mitsubishi's history in the automotive industry dates back to 1917. In that year, the Mitsubishi Model A was introduced as the first mass-produced car in Japan. This hand-built 7-seater was based on the FIAT Tipo 3 and proved to be very expensive compared to mass-produced European and American competition. Only 22 examples were built until 1921.

Mitsubishi model A from 1917

In the two decades that followed, Mitsubishi grew into an innovator. The brand developed Japan's first diesel engine, a four-wheel drive prototype, a diesel-powered truck, and a bus named Fuso.

Mitsubishi after the Second World War

Following the Japanese surrender in World War II, all Zaibatsus were forced by the Allies to split up. Mitsubishi Heavy Industries was divided into three regional companies. Each of these divisions was involved in the development of the automobile. After the war, Japan suffered primarily from a shortage of commercial vehicles. In 1946, a multi-fuel bus was introduced. A year later, an electric bus was launched. During that time, a truck with air suspension and one with a tilt cab were also introduced. Due to the severe fuel shortage in those early years, Mitsubishi concentrated primarily on the Silver Pigeon scooter.

60s

In the 1960s, the Japanese economy gained momentum. Wages rose and the automobile had a future again. In 1960, the Mitsubishi 500 was launched, a compact sedan. In 1962, the Mitsubishi Minica was added, a four-seater microcar. The first Mitsubishi Colt was also introduced at that time as a larger family car. In 1969, the first generation of the Galant appeared as a compact sedan. That Galant was a trendsetter in Japan and incorporated the best automotive technology available at the time.

1962 Mitsubishi Colt

In 1964, the three regional companies merged again to form Mitsubishi Heavy Industries. Three years later, that company was already producing more than 75.000 vehicles per year. Following the success of the automotive division, it was decided to spin off that division. In 1970, Mitsubishi Motors Corporation (MMC) was founded as a 100% subsidiary of MHI.

70s

Mitsubishi's strategy was to boost exports by forming alliances with renowned foreign manufacturers. In 1971, 15% of the company was sold to the American automotive giant Chrysler. Following this, the latter began importing Mitsubishis into the United States and selling them under its own brand names. MMC's production rose above 250.000 units per year.

In the early 70s, a distribution network was built up in Europe under the name Colt. Here, Mitsubishi wanted to sell its products directly to the public. In the Netherlands, the Japanese brand partnered with for this purpose. VolvoProduction had risen from 500.000 units in 1973 to 965.000 in 1978. That rapid growth also began to cause friction. Chrysler saw its foreign markets threatened, and Mitsubishi felt that Chrysler was interfering too much.

80s

By 1980, Mitsubishi had grown into a major car manufacturer building more than 1 million vehicles a year. Things were going much less well for Chrysler. The Americans were on the brink of bankruptcy and were forced to sell their production site in Australia to Mitsubishi. The Japanese named the site Mitsubishi Motors Australia Ltd (MMAL).

From 1982, Mitsubishi began selling its cars under its own brand name in the US. 30.000 cars were distributed among 70 dealers, in addition to the 120.000 that via Chrysler were sold. In the late 80s, the brand wanted to expand even further and a major television campaign was launched. By 1989, the brand was producing 1,5 million cars per year.

Mitsubishi Galant station wagon from 1981

In 1982, Mitsubishi launched the Pajero off-road vehicle. In 1983, a modified Pajero participated in the Paris-Dakar for the first time. In 1985, they won the race for the first time, and since then, the Pajero has been one of the most successful cars. The Pajero became popular worldwide and was named 4x4 of the Year in various countries.

Despite the tensions with Chrysler, both still needed each other. In 1985, they founded Diamond-Star Motors (DSM) as a 50/50 joint venture between the two companies. A factory was built in Normal, Illinois (USA), which began building cars for both owners starting in 1988. In 1991, the company came wholly into the hands of Mitsubishi.

Until 1988, Mitsubishi was the only privately owned car manufacturer in Japan. In that year, the company went public. MHI's share dropped to 25%, but that company remained the majority shareholder. Chrysler increased its share to 20%. With the capital raised, Mitsubishi was able to pay off debts and finance growth in Southeast Asia.

90s

In 1989, Tomio Kubo was succeeded by Hirokazu Nakamura as the new general manager. Following the success of the Pajero, he increased the budget for SUV development. Mitsubishi's wide range of four-wheel drive vehicles, from the Pajero off-road vehicle to vans and microcars, sold well in Japan, where the SUV broke through in the early 90s. By 1995, the brand had a market share of 11,6% in the Japanese domestic market.

After Chrysler sold its stake in the Diamond-Star joint venture to Mitsubishi in 1991, Chrysler models were produced there on a contractual basis. By 1992, Chrysler's stake in Mitsubishi had fallen below 3%, and it was announced that the remaining shares would be put on the market in 1993. However, both continued to cooperate. For instance, Chrysler continued to supply engines and transmissions to DSM. In 1995, DSM was renamed Mitsubishi Motor Manufacturing of America, Inc. (MMNA).

In 1991, NedCar was founded in the Netherlands as a joint venture with Volvo and the Dutch State. The Netherlands sold its share to both other partners in 1999. Two years later, Volvo was bought out by Mitsubishi. Since then, the latter has been the 100% owner of NedCar.

2000s

In 2000, two years after the merger of Chrysler with the German Daimler-Benz, the newly formed DaimlerChrysler acquired a controlling stake of 34% in Mitsubishi. With this €1,5 billion operation, DaimlerChrysler aimed to build a Welt AG, a global automotive giant. In 2001, the stake increased to 37,3% through the acquisition of Volvo's interest in MMC's truck operations. However, there was reluctance to inject fresh capital into the struggling Mitsubishi. An agreement of €3,15 billion was concluded with a partner, Phoenix Capital. As a result, DCX saw its stake drop to 23% and later to 12,4%. On November 11, 2005, that stake was sold for €867 million; a loss of €631 million over a five-year period. Phoenix Capital also sold over 90% of its stake on December 9, 2005. Both buyers, each an investment bank, sold the shares the following day to buyers within the Mitsubishi keiretsu for a multi-million dollar profit. With this, the car brand returned to Japanese hands.

In 2002, Mitsubishi Motors Europe was established to coordinate sales in Europe. Since the new Colt in 2004, the tide in that market began to turn again.

Meanwhile, Mitsubishi continues to suffer from declining sales. The third quarter of 2005 was profitable again after 11 consecutive losses. To save costs, 10.000 jobs were cut and new markets are being explored in the Middle East and Russia. In 2005, a partnership with PSA Peugeot Citroën was announced for the production of an SUV. This SUV, the Outlander, proved to be a great success, requiring production to be partially relocated to NedCar.

In 2008, Mitsubishi appears to have found the right path again. Car sales worldwide are increasing again by 9%. Mitsubishi has performed particularly well in recent years in countries such as France (+31%), Norway (+45%), and Switzerland (+20%). In the Netherlands, there was growth of 5%.