AUSTRALIA/US: Mitsubishi denies production end plans

By just-auto.com editorial team | 28 September 2006

Mitsubishi Motor (MMC) has no plans to end production at its Australian division's unprofitable vehicle assembly plant in South Australia, according to WardsAuto.com.

The report said MMC's statement came in response to media reports that Mitsubishi Motors Australia intends to shutter its Adelaide, South Australia, facility as early as December.

The spokesman reportedly admitted the plant continues to lose money, despite having cut production to 50 cars a day in January, but declined to comment on how long Japanese management will allow Mitsubishi Australia to operate at a loss.

Mitsubishi Australia has suffered several set-backs in recent years. After buying out Chrysler's Australian operations. it initially enjoyed considerable success with a line of locally modified and manufactured four-cylinder Galants during the oil crisis-hit mid-late 1970s.

In the early 1990s it began shipping re-specified versions of its then-new locally-developed and built Magna/Verada/Diamante sedan and wagon to both left- and right-hand drive markets world-wide, including the US and UK, supplementing healthy domestic market sales.

However, the redesigned Australian Diamante line launched in the late 1990s was not exported as widely (though it did go to the US). The Australian export business has now contracted to a trickle of right-hand drive cars, shipped primarily to neighbouring New Zealand, after Mitsubishi's by-then struggling US unit decided, from 2004, to replace both the locally-built Galant and the imported Australian Diamante with a single US-built model.

The most recent Australian Diamante redesign, the 380 derived from the latest US-built Galant, was launched in 3.5-litre V6 form only (despite a 2.4-litre I4 being available in the US), in Australia about a year ago but sales were hit when petrol prices soared following increased conflict in the Middle East - ironically a strong export market for cars built by MMAL's local rivals - GM's Holden unit and Toyota Australia.

Last March, there was a report Proton might import some 380s to Malaysia - a right-hand drive market - to help MMAL.

WardsAuto.com said Mitsubishi Australia is now looking to two yet-to-be-launched models - the [Thai-built] Triton one-ton pickup truck and [Japanese-assembled] Pajero SUV - to offset poor sales of the Australian-produced large 380 sedan [which has been 'relaunched' once since it was introduced with little success].

WardsAuto.com noted the slow-selling 380 has received generous federal government subsidies under a scheme to bolster Australia's car-making industry from last year to 2015 and MMAL now plans to produce between 15,000 and 20,000 units this year.

Federal industry minister Ian Macfarlane reportedly confirmed Mitsubishi Australia no longer qualifies for government grants because its production is below the threshold of 30,000 units annually. However, the government has granted the auto maker an exemption, citing "national interest", the report added.

Additional reporting: Graeme Roberts