Mitsubishi Motors Australia Ltd (MMAL) together with its parent company Mitsubishi Motors Corporation (MMC) has just issued a press release outlining the closure of the Adelaide plant as well as committing to a long-term participant in the Australian car market as a full importer.
Official word from Mitsubishi has confirmed the closure of the Tonsley Park production facility in Adelaide, (where the 380 sedan is made) and also the end of production for the 380 Sedan. No other vehicles in the lineup will be affected.
"We are focused on growth in Australia, notwithstanding the decision to cease local manufacture." Mitsubishi Motors Australia Ltd President and CEO Robert McEniry said
The closure comes despite strong growth by the Japanese brand as a whole. Australia is the fifth largest country for Mitsubishi vehicle sales in the world and the manufacturer has grown 20.7 percent in the last 12 months.
Nonetheless all the good results are solely due to Mitsubishi's imported passenger, light commercial and SUV vehicles and not the locally manufactured 380 Sedan.
"However, it is an inescapable fact that there is now a deepening trend away from large cars. The Adelaide plant has been the subject of numerous studies over recent years into its utilisation and options for alternative model production.
"Over the last few months, we have been working closely with MMC to determine the best business model to secure Mitsubishi's long term aspirations for the Australian market. After a searching analysis of the current business structure and extensive review of the available options for the Adelaide plant, a decision has been made to cease production and focus on a full import approach.
"We can see no path for a return to viable production levels of the 380 sedan, or a commercial case for developing any replacement production.
"This has been a very difficult decision. We have a deep appreciation of the commitment and loyalty of our workforce, suppliers and other business partners who have given the plant a proven track record of flexibility, cost efficiency and excellent quality control," Mr McEniry said.
Mitsubishi will also pay back the $35 million grant received from the South Australian government in 2002.
FCAI chief executive Andrew McKellar was quick to point out that despite the significant impact on the Australian manufacturing sector, Mitsubishi's contribution to total vehicle manufacturing in Australia was now only in the range of two to three per cent of all vehicles made.
"Notwithstanding the Mitsubishi decision there is no doubt automotive manufacturing continues to be particularly important to Australia, today's announcement highlights the intensely competitive environment in which all Australian motor manufacturers are operating. Australia has the most open and competitive automotive market in the world." McKellar said.
The plant's closure will put 930 Mitsubishi employees out of a job as well another estimated thousand workers who are indirectly linked to the 380 project.
Mitsubishi workers will receive very favourable separation packages based on those provided to the Lonsdale Engine Plant employees in 2005.
"Over the last ten years, MMC has gone beyond the call of duty in supporting manufacturing in Australia through major capital investment, in addition to covering significant operating losses. Having persevered for so long, it is simply not rational to contemplate continuing such losses. To invest in further models for local production can not be justified."
"Given the magnitude of the challenge, government assistance is not the answer to maintaining manufacturing at Tonsley Park, and this has not been sought by the company." Mr McEniry said.
Current 380 owners need not to worry (except for resale) as Mitsubishi also announced plans to support past and future private buyers of the 380 with an extension of their warranty terms to six years.
"Mitsubishi is now focused on further growth in the Australian market. We have a comprehensive model range - Lancer, Colt, Grandis, Pajero, Outlander, Triton and Express Van, which today comprise nearly 90% of our annual sales - with more new products to come, confirming our long-term presence and growth aspirations in the Australian car market," Mr McEniry said.
March 31st will mark the last day for Mitsubishi's local operations in Australia. This will leave Ford, Holden and Toyota as the only remaining manufacturers with an Australian production facility.
Mitsubishi Australia Overview
212 single and multi-franchise dealership sites across metropolitan and regional Australia
|1885||TJ Richards Blacksmith business founded in Adelaide|
|1905||T J Richards commenced car body production.|
|1917||TJ Richards commenced assembly of motor vehicles inAustralia.|
|1947||TJ Richards taken over by the Chrysler Corporation.|
|1960||The Mitsubishi marque launched in Australia with theintroduction of the first imported small car Colt.|
|1964||Tonsley Park vehicle manufacturing plant opened by ChryslerAustralia Limited.|
|1971||Chrysler Australia Limited commenced manufacturingMitsubishi-designed Galant.|
|1980||Mitsubishi Motors Corporation of Japan and Mitsubishi|
|1985||Magna production commenced.|
|2001||Mitsubishi Motor Australia Limited became a 100 percent ownedsubsidiary of Mitsubishi Motors Corporation|
|2005||380 sedan production commenced.|
|2008||Mitsubishi Motors Australia Limited closes Tonsley Park facilityand moves to full-line import business model.|
1284 South Road, Tonsley Park
63.9 Hectares Land
185,000 Sq m Building and Improvements
1,150 personnel currently employed
930 employees will be affected by this decision
MITSUBISHI IMPORT SALES GREW 32.4% FROM 2006 TO 2007