Mitsubishi Motors Australia Ltd is well on the way to cementing its long-term future as a manufacturer – and ending years of speculation it was a candidate for closure, writes Mike Duffy.
The newly-appointed South Australian state Labour government has honoured a $A20 million industry aid package, pledged by the former Liberal administration, to assist the Adelaide-based car maker forge ahead with ambitious plans to build two new cars for release in 2005.
Japanese parent Mitsubishi Motors Corp now is waiting for the Australian Federal Government to come up with its own assistance package before giving the go-ahead for the $A900 million new-model project.
MMAL staged a spectacular turnaround in its fortunes by booking a $A16.1 million profit for calendar 2001 following a record loss of $186 million the previous year.
This was achieved by sales of $A2,579 million, compared with $A2,471 million in 2000 and a 60 percent increase in exports to 19,215 vehicles.
The return to profit was a non-negotiable condition set by MMC for its Australian subsidiary to base its case to remain as a manufacturer.
MMC has given provisional approval for MMAL to develop a replacement Magna for release in 2005.
As well, the Australian company has been given the nod to develop a premium-quality large car for sale in the United States, Australia and the Middle East.
However, Mitsubishi will sanction the two-car project only if the federal and state governments share some of the development costs and help balance the business case.
MMC chief operating officer and vice president Rolf Eckrodt revealed at last week’s Geneva Motor Show that he had a letter from Australian Prime Minister John Howard indicating interest in helping the car maker.
Eckrodt refused to speculate on possible outcomes if the two governments failed to come up with industry grants which matched Mitsubishi’s expectations.
“I am full of hope,” he said. “I have an optimistic approach.”
Mitsubishi will lose the right to export the Diamante-badged Magna to the United States – currently worth 15,000 units a year – from the end of 2004 because Mitsubishi America is to build its own luxury version of the Galant.
But MMC has identified a potential for a premium quality big car for the Australian domestic market and for export to the US and the Middle East.
Mitsubishi Motors Australia MD Tom Phillips said the big car would be highly specified and competitively priced to compete in the lower end of the luxury segment of the US.
In other news from Down Under, Toyota Australia has made its biggest single shipment of cars to export markets.
Over 2700 left hand drive Camrys left Melbourne for the Middle East. This was 1000 more than the previous record, set in February 2001.
Toyota Australia’s senior executive vice president John Conomos said the company export revenue in 2001 had topped the $A1.4 billion mark – 40 percent higher than the previous year.