Australia could be set for an anchoring role in DaimlerChrysler‘s Asian assault over the next 10 years, writes Paul Gover.

The company is aiming to eventually earn a third of its sales and profits in Asia and says it is working on a Mitsubishi strategy with a prominent role for its Australian car making facility.

Wild speculation on the future of the under-utilised Adelaide factory has run all the way from total closure to building a new Asian four-wheel drive or extra production capacity for Chrysler‘s super-successful PT Cruiser.

The member of the DaimlerChrysler board of management responsible for Asia, Dr Eckhard Cordes says a recent $A172 million investment in Adelaide points to a safe future for the factory.

“My main message is that, had we decided to close down this operation, then we wouldn’t have put fresh money in,” Dr Cordes said in Melbourne on Saturday morning (9/12/00).

“We are definitely not in a position …to just close the place down. If that was the intention then obviously we wouldn’t have done that.”

Japanese management has made several threats about the viability of the Mitsubishi operation in Australia if it is not able to trade profitability.

A massive restructuring at the beginning of the year, followed by the appointment of ex-Toyota heavyweight Tom Phillips as managing director, has given the company new impetus and boosted export orders for the Aussie-made Magna (Diamante) family car.

Mitsubishi Motors Australia should have been back in the black before the end of the year, but a disastrous slide by the Australian dollar has put that back by at least six months.

Even so, Cordes moved to dampen any concern over the future of the factory and said it should be settled early in 2001.

He said a high-level team led by DaimlerChrysler’s Steven Torok, who sits on the Mitsubishi board, would be in Australia in the week before Christmas to decide its exact role.

“The long-term plan for the facility in Adelaide hasn’t been set yet. And the reason is a very simple one: Mitsubishi Motors as a whole company needs, to put it mildly, some restructuring,” Cordes said.

“We need a global approach here. It would be wrong to say that’s what we need to do in Australia.

“We have kicked off the process to come up with some sound, aggressive restructuring process for Mitsubishi. This process hasn’t been finalised yet.

“We will come up with that plan, I would say, in the first quarter of next year. In this context, then, we will ultimately make up our mind what to do with this operation here.”

He refused to discuss the speculation about building either the PT Cruiser or Asian four-wheel drive, although Mitsubishi chiefs have confirmed that the Adelaide line has the capacity to assemble a Pajero-sized off-roader.

“I can’t comment on potential options we have. Obviously, it’s one of the important issues we have to deal with when discussing the future operations of Mitsubishi. It is one of the challenging, open questions we have to deal with … when putting MMC on safe ground,” he said.