Mitsubishi, the troubled Japanese auto manufacturer, seems to be heading towards its break-even point. The company is six months ahead of schedule in its recovery plan despite a falling European used car market. The company has ambitious plans, but with the backing of its major shareholder DaimlerChrysler it could succeed.
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After undergoing a downturn last year, Mitsubishi is moving back up into the black at a significantly greater speed than the company originally anticipated. The company made a loss of E330 million in 2001 and initially indicated that this loss would continue into 2004. However, this has now been revised with the manufacturer now expecting to reach break-even by then.
Dogged by financial troubles which left the company under-invested and its model range out-dated, the company is bouncing back with 12 new model introductions over the next five years. One of these is in association with its major shareholder DaimlerChrysler, with the launch of a new compact car, which will be badged both Smart (Daimler’s small-car brand) and Mitsubishi.
Despite the positive news, the company is still very cautious about its future. Its European CEO Stefan Jacoby has indicated that the company will try to maintain a European sales volume of around 200,000 a year, down from 250,000 vehicles two years ago, a drop largely due to the withdrawing of several models.
The company is trying to stabilize its operations and in three years aim for a sales volume of 300,000 vehicles and 2% market share. This is an ambitious target given the competitive nature of the market – but with the help and backing of Daimler-Chrysler, it looks feasible.
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