Mitsubishi Motors North America

Mitsubishi Motors North America

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Type	Subsidiary
Founded	1981
Headquarters	6400 Katella Avenue, Cypress, California, 90630-0064
Key people	Hideyasu Tagaya (Chairman) Hiroshi Harunari (President, CEO) Dan Booth (EVP, CFO)
Products	Automobile manufacturing, finance, R&D
Parent	Mitsubishi Motors (100%)
Subsidiaries	Mitsubishi Motors Credit of America, Inc. (MMCA) Mitsubishi Motors R&D of America, Inc. (MRDA) Mitsubishi Motor Sales of Canada, Inc. (MMSCAN)
Website	Mitsubishicars.com

Mitsubishi Motors North America, Inc. is the North American operation of Mitsubishi Motors Corporation, overseeing sales, manufacturing, finance, and research and development functions. The company manufactures and sells Mitsubishi brand cars and sport utility vehicles through a network of almost 700 dealers in the United States, Canada, Mexico, and the Caribbean.

It operates its administrative headquarters in Cypress, California. Also based there are its captive finance subsidiary Mitsubishi Motors Credit of America, Inc. (MMCA), established in 1991. Mitsubishi Motors R&D of America, Inc. (MRDA) also has its Californian Research and Design Center there, while the R&D head office is in Ann Arbor, Michigan.

MMNA's sole production facility, formerly known as Diamond-Star Motors and then Mitsubishi Motor Manufacturing of America, is based in Normal, Illinois, where 1,900 workers are employed building the Galant, Eclipse, and Endeavor models.

History

MMNA was formed in 1981 after tensions arose between Mitsubishi and its then U.S. import partner, the Chrysler Corporation over conflicts in the international subcompact market, leading the ambitious Japanese company to establish its own sales network. The first year's allocation of 30,000 vehicles in 1982 were the $6,500 Tredia sedan, and the $7,000 Cordia and $12,000 Starion coupes, followed shortly by the Mighty Max pickup truck, and were sold through 70 dealers in 22 states.

The Diamond-Star Motors joint venture with Chrysler in Normal, Illinois began in 1985, as American-built cars would not be subject to the same restrictive quotas as vehicles imported from Japan. The company sold 67,000 cars in the United States in 1987, but by the time the new factory came onstream the next year, it offered a capacity of 240,000 vehicles. With this new capacity, Mitsubishi made a fresh push to expand its American operation in 1989, increasing its sales network by 40 percent to 340 dealerships and producing its first nationwide advertising campaign.

Mitsubishi's North American R&D facility in Ann Arbor, Michigan.

1991 was a landmark year for Mitsubishi in the United States. It bought Chrysler's share of Diamond-Star for $100 million, and became the first Japanese owner of a U.S. car rental agency when it purchased Value Rent-a-Car. Sales of Mitsubishi-badged vehicles reached almost 190,000.

The remainder of the 1990s provided both ups and downs for MMNA. The rising yen and a weak global economy caused a drop in production and profits, but it weathered the storm better than its Japanese competitors. However, in 1994 it was the subject of two lawsuits brought against it. The first, filed by 29 women in December 1994, accused the company of fostering a climate of sexual harassment at its Normal, Illinois plant. Then, in April 1996 the Equal Employment Opportunity Commission (EEOC) filed a class action suit on behalf of approximately 300 other women who worked at the plant. Mitsubishi initially denied any problems at its plant but later hired former U.S. Labor Secretary Lynn Morley Martin to recommend changes to its policies and practices. The 1994 suit was settled for $9.5 million in August 1997, and an agreement with the EEOC was reached later that year as well.

Mitsubishi recovered quickly after this, and while its global operations were suffering in the wake of the 1997 East Asian financial crisis, MMNA reported banner results, breaking its sales records every year between 1999 and 2002 and seeing growth of 81 percent to 345,000 vehicles, while the company improved its position in Harbour and Associates' Assembly Productivity Ranking from last to first. At this point Mitsubishi was the fastest growing auto brand in the United States.

Troubles began to emerge in 2003. One of the roots of their rapid growth was a "0–0–0" finance offer—zero percent down, zero percent interest, and nothing per month (repayments deferred for 12 months)—aimed at increasing MMNA's annual sales to 500,000 vehicles. However, numerous credit-risky buyers ended up defaulting at the end of the year's "grace period", leaving Mitsubishi with used vehicles for which they'd received no money and which were now worth less than they cost to manufacture. The company's American credit operation was forced to make a $454 million provision against its 2003 accounts as a result of these losses.

In the wake of this and other issues sales plummeted, to 243,000 in 2003, 139,000 in 2004, 124,000 in 2005, and 119,000 in 2006. New introductions have had mixed success, with the Outlander and Eclipse models showing sales growth in 2006, but the Endeavor SUV failing to meet expectations. A new Lancer compact car debuted in 2007, and in an effort to exploit unused capacity at its Normal, Illinois plant more export markets for the Galant sedan are being sought..

Production and Sales

Production

Year	Eclipse/ Eclipse Spyder	Endeavor	Galant	Chrysler Sebring/ Dodge Stratus	Total
2000	77,795	-	104,313	40,282	222,390
2001	70,565	-	94,820	28,359	193,744
2002	75,323	10	100,760	28,140	204,233
2003	25,974	49,987	53,455	28,443	156,859
2004	10,433	19,448	39,841	28,920	98,642
2005	37,399	22,403	29,337	-	89,139
2006	39,602	18,097	35,541	-	93,240
2007	24,333	13,465	37,729	-	75,527
2008	13,814	2,316	27,747	-	43,877
2009	2,278	5,401	15,017	-	22,696

Sales

Year	United States	Canada	Mexico	Puerto Rico	Total
2000	314,417	-	-	-	-
2001	322,393	-	-	-	-
2002	345,111	3,223	-	11,815	360,149
2003	243,592	12,786	6,044	10,490	272,912
2004	139,270	10,900	11,911	12,230	174,311
2005	115,168	10,293	15,568	14,923	155,952
2006	124,508	11,801	16,868	11,046	164,223
2007	124,429	17,790	17,710	11,963	171,892
2008	84,010	18,874	16,100	-	118,984
2009	53,775	20,062	13,805	-	87,642

(sources: Facts & Figures 2005, Facts & Figures 2008, Facts & Figures 2010, Mitsubishi Motors website.
NOTE: Puerto Rico is currently included in Central and South America region, effective from FY2008.)

External links

• Mitsubishicars.com, official site