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Mitsubishi not sustainable without Renault-Nissan alliance

The merger of Mitsubishi and the Renault-Nissan alliance has saved the iconic Japanese brand, according to the brand’s chief operating officer.


Speaking to CarAdvice at the Geneva Motor Show today, Trevor Mann, the long-time Nissan executive and recently appointed chief operating officer of Mitsubishi Motors, says that while the situation with Mitsubishi wasn’t as dire as when Nissan merged with Renault back in 1999, there are a lot of similarities.

“I think if you look at Nissan going back to 1999, Nissan was dead. It had a debt mountain of US$19 billion or something, so Nissan was really, really on its knees," he said.

"Mitsubishi is not on its knees. It had its problems in the middle of last year, but from a financial point of view it has not been so bad, it has been static around the one million units [sold]; we were making six per cent operating profit margin for the last four or five years which is relatively healthy.

“We are relatively cash rich so we don’t have debt, so in that respect it’s not like Nissan. In other respects, we need help, we are about one million units and one million units for a company today is not really sustainable. That means that even if you’re relatively healthy in terms of profit margins, the mass amount of dollars that you’re accumulating doesn’t really allow for you to regenerate and invest in new platforms and technologies and compliance that you have to invest for both in terms of safety and environment. It becomes very difficult.”

Mitsubishi’s merger with Renault-Nissan will see the group’s total output reach around 10 million vehicles, making it the third-largest car company in the world. That provides huge economies of scale, previously unprecedented for a brand such as Mitsubishi. This also allows for technology sharing across autonomous driving capabilities as well as electric and plug-in hybrid powertrains.

So while the merger was a necessity for Mitsubishi, it was also logical for Renault-Nissan.

“Mitsubishi has got a very, very long and strong heritage as an automotive engineering company, 4x4s and pick-ups, and very strong in Asian and Oceania region. Relatively, we also have some interesting technology that we can bring to the alliance, another one million units to Nissan.

“Where else can we contribute? We are very strong in Asiana, south-east Asia, New Zealand, Australia, we have much more market share there than global average – 15 per cent market share in the Philippines, eight to nine per cent in Thailand… we punch harder in that region… and have relatively high manufacturing capabilities in that region.”

It remains unclear yet just how Mitsubishi will progress from here, whether it will restructure itself to focus on its strengths in the SUV and light-commercial vehicle segment or if it will rebuild the brand to be a fully-fledged manufacturer. So far, it appears the latter is out of the question in short to medium term.

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