Mitsubishi: what went wrong
February 7, 2008 by rjw
Mitsubishi: what went wrong
-by Robert Wilson
So that’s it then. Not with a bang, indeed not even with much a of whimper. After 28 years Mitsubishi Motors Australia announced the end of production of the 380 in Adelaide, putting 930 employees out of work.
It was hardly a surprise, and there was little sense of shock, even from the unfortunate workers at the plant, who told television crews they knew something like this had to happen one day. The production line had, after all, been running at 35 cars a day, less than Holden across town could make in an hour.
Prophets of doom had been muttering about the closure of the Tonsley Park factory for close to 10 years. How did it come to this?
It’s important to remember that 10 years ago the future looked bright for Mitsubishi Australia, brighter, to be honest than it looks for the three remaining Australian car makers today. But the problems that led to the death of Tonsley Park also date from then.
In 1997 Mitsubishi Australia made 57,000 Magnas and luxury Veradas selling 41,000 locally and the rest overseas. In North America the Diamante, as it was known was a reasonably common sight in the suburbs, its bland styling blending in well to the US carscape. But it was in the late 1990s that the first of three crises hit Mitsubishi globally. The demise of the 380 can ultimately be traced to these.
The Asian financial crisis of 1997 hit Mitsubishi hard. The Japanese parent company was forced to cancel dividends in 1997 and 1999. Other projects, such as development and eventual replacement of the modestly successful sedan it was making in Australia also went on the back burner.
In March 2000 DaimlerChrysler bought a 34 per cent stake in Mitsubishi, effectively taking it over. It soon became evident that the Adelaide Mitsubishi plant was not high on the new management’s agenda.
*****PRIMO!*****
I dont think it was just 1 thing, but many.
We all know what they are/where so no point rehashing them on and on.
Time to move on, and lets find out what MMA will replace it with?
Does anybody think the very last one built would have any long term value?
Cheers
F-0
MMLA has been very good to works, and will pay them fully and also GovCo will get its money back.
Comes that go bust never do anything ethical, cannot say that of MMAL
Least they did the correct thing and let the 930 workers have a good XMAS before informing them.
I blame the management more than anybody else, the poor workers are not to blame.
Cheers
F-0
“Least they did the correct thing and let the 930 workers have a good XMAS before informing them.”
Just after they’d racked up a Christmas debt that they may now struggle to pay.
Im a fleet buyer for the fed gov. I took half a dozen 380’s when they came out… thought it would be a change from the bunch of falcodores we had. I just have a few things to say.
1. Damn cheap arse plastics… come on they invented the stuff like decades ago, surely you could have used something better.
2.The worlds largest digital clock display – that can be seen from space!!!
3.audio controls on the BACK! of the steering wheel arms ( didnt even notice they were there for 3 months)
4. One good point tho, it did have a nice 5 speed auto changer… back when ford/holden still had 4 speeders.
5.lastly didnt benefit much from a dance with the ugly stick either.
wonder how this will affect sales of the their new hero Evo car. It surely cannot help the brand – at least not in Oz.
Mitsu may want to try and reinvent itself as a importer of quality vehicles, but given the lacklustre reviews of the ‘all new’ Lancer and Mitsu’s appalling quality reputation in general, at least here in Australia, they are not starting off the Year of the Rat terribly well…
Duckula – you know why i think your telling giant porkies about being a government fleet buyer? because a government fleet buyer wouldn’t give the slightest bit of a shit about those 5 things you just listed, all they care about is price, cost of maintenance and resale. Nothing else. Why not just say you those five points without the cover of “i’m a fleet buyer for the fed government”
Flying High, most industry survey’s do NOT support your argument that mitsubishi have an “appalling quality reputation” infact quite the opposite. Australian’s believe mitsubishi make quality cars however they find mitsubishi’s products to be boring, which is the main hinderance to sales in recent times. Mitsubishi is clearly trying to turn this around with the heavy focus on styling with the new lancer and outlander models.
Fact is, despite all of the 380’s faults, it actually had the BEST customer satisfaction level of all australian built cars. Can’t argue with that mate.
As for it hurting mitsubishi’s reputation in australia and therefore hurting sales, mate i seriously dont think so, the australian media have given this very limited media coverage (which is somewhat surprising!) and the man in the street doesn’t really have any clue of whats going on. Also, lets not forget, sales of the colt are up 48% last year, sales of the lancer up 13.5% last year (and growing rapidly with the new model), sales of the grandis up 28%, sales of the outlander up a whopping 64%, pajero up 56%, triton up between 34 and 40% depending on the model and the express van up 46%! Infact the only model to go down in sales in 2007 from 2006 was the 380, which is now discontinued. If anything mitsubishi in australia is very much a company on the up and although the loss of 960 aussie workers is a bitter pill to swallow, its actually going to help the mitsubishi brand in australia in the long run.
Richo – why question Duckula. You don’t know jack sh1t you’re guessing dude
for the record, i have personally owned 4 mitsubishi’s now, my TL magna has NEVER had a mechanical fault in its 4 years of ownership and is still going strong, my express van was a bit of a crappy old van but it NEVER broke and you can’t ask for much more then that out of a van, my old 93 magna needed some new engine mounts after 170,000k’s, not an entirely unreasonable request, otherwise it was perfectly fine, and i have just taken delivery of a new lancer which i haven’t had a problem with either. So thats first hand evidence from a long time mitsubishi buyer that they’re so called “poor quality” is GREATLY exagerated.
oh and the new lancer didn’t receive lackluster reviews either, this very website infact found that it was a very good car, as did wheels although they did have a few issues with it against its car of the year criteria, although they still said it was a very good car.
No Name – your name really says it all really, not willing to put a name to your comments.. Mate i have worked for australia post (yes a government agency) for the last 4 years and one of the guys in the fleet department told me straight that they don’t even go and sit in a car, let alone drive the thing, before they go out and buy it. They just look at the cold hard facts, will it fulfill the duties it needs to perform, how much does it cost, how much is maintenance, whats the resale. When that all looks good, they purchase the vehicle directly off the manufacturer or importer. Thats not guessing DUDE
Richo – rather than base my comment on ‘industry’ surveys – I base my theory on directly knowing ppl who have owned Mitsus – and once was enough for them. wrt to number of sales, well sales of the ‘ugliest Impreza ever’ are also on the rise and the best they have ever been and in general many cars across many makes are selling new cars like never before – so Mitsu is just along for the ride. I for one would be hard pressed to take ownership of any Mitsu, although admittedly the Lancer is certainly a great looking shell.
btw Richo, which Mitsu dealership do you work for? I might come and see you when the Evo X arrives and we can go for a spin?
i used to wash cars for a hyundai dealership back in the excel days while at school, never a mitsu dealership though. You’ve TALKED to people who have owned mitsu’s, i have OWNED mitsu’s, fairly big difference there ay…
And yes most cars are up, not just mitsubishi, HOWEVER, mitsubishi isn’t “along for the ride” as you put it, because if it was then its increase in sales would be tracking along with the incrase in sales accross the entire market, however this is not the case. Mitsubishi have INCREASED their market share in 2007 over 2006, something that is simply impossible if you are just “along for the ride”
although if you like i can refer you to the guy i have bought my last 3 mitsubishi’s off?
All I can say is I am very happy with my TL VR Limited Edition Magna, its way better than the old 351XC ford or 318 VJ charger, or the LH torana or HQ monaro I had before!
It is a pity that the factory is closing, cause the 380 really is a good car with a good warranty.
I don’t think you know what you’re talking about Flying High. I’m own an old Mitsu Mirage, fantastic little car that’s been endlessly reliable on a minimal budget. A lot of other students in similar situations say the same things about Lancers. I’m not sure who you’ve talked to but of everyone I know who owns or has owned a Mitsu they generally say pretty positive things about quality and reliability. Maybe not looks or performance but that’s not the issue.
In terms of Mitsubishi ownership a significant porportion of Mitsubishi sales come from repeat buyers; previous Mitsubishi owners who were satisfied enough to buy another one. Mitsubishi’s problem has always been attracting new buyers.
In terms of future sales for Mitsubishi the new Lancer, which critics all over rave about, is selling very strongly. I think the new Lancer with probably sell enough to cover for the sales the old 380 wasn’t getting, especially given people are moving towards 4 cylinders over 6.
Quote from GTRmon “In terms of Mitsubishi ownership a significant porportion of Mitsubishi sales come from repeat buyers; previous Mitsubishi owners who were satisfied enough to buy another one. Mitsubishi’s problem has always been attracting new buyers.”
exactly right my friend, the salesmen who has sold me my last 3 mitsu’s, who is the sales manager now of his dealership which i wont name, said the exact same thing to me while we where having a deep and meaningful conversation about mitsubishi’s fortunes while i was picking up my new lancer. I sat in my new car at the end of the dealerships driveway ready to drive off with him talking to me through the window of my car for about 45 mins lol
Well written article guys, an interesting read.
What went wrong?
The Magna/380 was always ugly, and always FWD.
No matter how many 50yo mechanics love their car, the buying public voted with their feet, and this can’t be denied.
I definetely agree with Reckless. Reliability is no guarantee of strong sales, the buying public are just a little bit more sophisticated and diversified than that.
Ultimately, the 380 is dead and I can’t see people in the large car market jumping to sign up for a US made Galant. Even traditional Magna buyers are likely to be more than a little miffed that their home grown car is no longer the little Aussie that could.
Well written article guys.
What went wrong? Well MMAL did several things wrong:
- It stuck too long with old Magna, losing customer base.
- It discounted to fleets and not to private buyers.
- The 380 was good but not great
- it had to be ground breaking, the best ever, COTY and more and it wasn’t.
- The 380 was still FWD and Australians like RWD
- 5 year diamond warranty – who cares
- the name 380, was absolute failure just look at Honda’s use of Accord “Euro”, Toyota’s Landcruiser “Prado”, different car, but same name.
What MMAL could of done better:
- Updated the previous Magna and kept the name and image as one of innovation, not cardiagan wearers
- have a “hero” model in the range, XR6, V8SS and WRX help sell more base line cars
- Change strategy altogether 5 years ago and build an AWD, Ford Territory type vehicile as MMAL already had an AWD driveline in 2002.
For all you 380 owners, start looking at depeciated values of 30+% after 3 years.
The general public a little more ’sophisticated and diversified’ than that…
LOL
Yeah right…
Ha ha try using your brain Adam (aka Mada).
Australia is one of the smallest car markets in the world yet we have over 20 makes and thousands of models. All with a population of only 21 million people.
It’s quite obvious the Australian car buying public have one of the widest and pickiest tastes in the world.
Good points Qman
well at least now I can say I know of ppl who are very happy with their mitsus. I look forward to going for a run in the Evo in their range – in April all going well!
Richo,
Not only do Govt fleet buyers drive the cars, they take them home for weekend and evaluate them. I’m not disputing your collegues story, just balancing with some wider facts.
Adam, lol. that’s why they buy so many Corolla’s aye.
At the end of the day, if Mitsu aren’t making money, they’ll take their ball and leave. I for one say good ridance and completely agree with Flying High’s comments on lots of mates and family members owning mistu’s will never again due to stupid issues that you’d think a car manufacturer would have sorted out by now.
Either way, doesn’t matter now. The 380 will take over from the Magna as a great value for money car on the secondhand market.
number 100 no wagon
getting pushed around americas a bully it all about them get over yourself america and give us ago in the limelight
This article is well written covered all the issues affected Mitsubishi globally. There were few factors which caused the Diamante/Magna exports to North America, one was the lax finance scheme, but that affected ever Mitsu model sole in North America, the other factors were the updated North American Galant in late 2003 which was larger more powerful and stronger chassis than the Diamante/Magna, the strong Aussie $.
The 380 was never expected to be exported to LHD markets because the North American Galant is already being exported.
I wouldn’t expect Mitsubishi to bring the current model US Galant to Aus. Mitsubishi might bring the next generation Galant in 2010 based on the concept ZT.
Kenn, there actually was an export program for the US and other markets, however it was for a long wheel base luxury version of the 380 which unfortunately got canned.
Omen- good points but everything MMAL wanted to do with the 380 was based on getting the ok from MMC (Japan). MMAL planned to have two engine and (auto) tranny options for the 380, MMC said no and we got stuck with one. AWD or RWD was never going to happen as the 380 had to be based off the US Galant and unlike the Magna platform was unable to be change to suit and AWD system. Even go back to the TL upgrade…MMAL had a design that was ready to go and MMC employed a Frenchman to redesign the vehicles and he came in and changed the TL design to fit in the the rest of the range…MMAL didn’t like it but MMC forced them to go with it. As as you read in the article MMC problems ment MMAL had to stick with the last gen Magna longer than expected hence the heavy TL upgrade. And to all the people baggin Mitsi…..don’t knock it until you drive it.
Jason Says:
February 8th, 2008 at 11:37 am
It’s quite obvious the Australian car buying public have one of the widest and pickiest tastes in the world.
—————————————————————-
Bwahahahahahaha! Is this your idea of a joke? If the tastes of Australians were so picky and varied, they wouldn’t be buying Toyotas in droves. Most Australians buy cars as a whitegood, just to serve a basic purpose of getting from A to B. They may have heard from their friend’s uncle’s butcher’s gardener’s cousin that Toyotas are so incredibly reliable and nothing ever goes wrong with them so they buy based on that. Europeans are the ones with more discerning tastes.
As for Mitsubishis, for the last 17 years my father has had 2 Magnas, 2 Veradas, and 2 Pajeros in that order (all company cars). Now he has a Holden Caprice. The only reason he didn’t go for a Mitsubishi again is because he wanted a luxury car and had more money to spend. I have had two Lancers, the previous VRX model and now the new VRX model. And his company fleet have been buying mostly Mitsubishis for a long time and continue to do so.
Chucky you still fail to address the evidence I put forward. The number of models and brands on the Australian market is massive when you compare the size of the Australian market with any market in the world, including Europe. Ask any marketing exec working for a car company and they will tell you straight up the Aussie market is one of the fiercest.
Your assertion that most Aussie’s buy cars as white goods is a massive generalisation and in fact isn’t supported by the evidence. Don’t confuse fleet sales data with private sales figures. Both are lumped together and while government and business may be buying Toyotas in record numbers the private market has a much more varied taste.
we won’t even have the words Mitsubishi Motors Australia in our vocabulary after March this year. What we will have is Government posturing and saying nothing but empty words and empty fruitless promises until MMAL becomes a past memory, and that will only be a couple of weeks at best.Also the unions will be talking about re-using the empty facility/plant as a manufacturing hub, bla bla bla.
All I know is they will all be placed on a scrap heap. Having them on your resume is a huge obsticle to overcome.They do have a reputation with many employers and it isnt a positive one so ive recently found out.Best thing the employees can do for themselves is not mention this time in their working lives on their resume if they can.
Crysler valiant was in this country for 19 years mitsubishi destroyed all photos and records of the valiant. Mitsubishi lasted 19 years !! at least crysler didnt build a car that looked like a p76 that had been hit up the arse.
Bon voyage missesbitchie !!