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Mitsubishi's decision time

In the balance: Mitsubishi cannot make a 380 replacement profitably in Australia without exporting.

Japan to decide Tonsley Park future by early next year

17 Oct 2007

THE long-term future of Mitsubishi Motors’ Australian manufacturing operations is scheduled to be clarified early next year.

A series of decisions regarding strategic manufacturing plans starting from late this year and stretching into early next year at parent Mitsubishi Motors Corporation in Tokyo will shape the future of the Adelaide-based operations.

The plans could see the Australian operation granted the production responsibilities for a 380 large car replacement. But GoAuto has also learnt that Mitsubishi Motors Australia Limited (MMAL) would like to build a smaller vehicle.

There is said to be an interest in a crossover wagon to act as a bridge between the Outlander and the Lancer.

GoAuto understands the potential vehicles that MMAL will be discussing at the upcoming Tokyo meetings are not currently in production and are yet to be revealed to the public.

MMAL president Rob McEniry told GoAuto last week that a decision on the future of its Tonsley Park manufacturing plant in Adelaide was due to be made soon.

“At the end of ’07 into the early part of 08, Mitsubishi will be going through its model cycle and mid-term planning and that’s when we would look at replacement or potentials for the 380 and that is exactly where we are,” Mr McEniry said.“Until those studies are completed we will continue as we are.”

21 center imageFrom top: Concept-ZT, Lancer and Concept-cX (bottom).

A new smaller model could ensure the continuation of manufacturing for Mitsubishi in Australia. At present, its operations here are unprofitable based on its current annual production of around 10,000 cars per annum.

GoAuto asked Mr McEniry whether he could see the MMAL’s local manufacturing arm making a profit. His response was: “Not unless there is a major resurgence in that high-priced group, the large car, and quite frankly I can’t see that turning around quickly.” Mr McEniry added that MMAL was committed to local manufacturing and, along with other Australian car-makers, was looking at ways to reduce costs further and to make the operation as lean as possible.

He also signalled that government funding could prove pivotal to the future of the Australian manufacturing operation.

“Both the (Federal) government and the opposition are talking about opportunities going forward and we will wait to see what comes out of that,” he said.

VFACTS figures show Mitsubishi has sold 8170 units of its 380 model so far this year, compared to 9603 for the same period last year. The story could not be more different for its imported vehicles, especially Outlander, Triton and Lancer. Thanks to its imports, MMAL has sold 48,565 cars to the end of September, which is an 8295-unit improvement on the same period last year.

Improved sales and profits from Mitsubishi’s imports are making up for the losses of the local production of the 380. “It is about getting the right balance,” Mr McEniry said.

“One of the strategies, if you recall, is having a total reliance on just your local car is fraught with danger as a business model and it is not where the growth is in the marketplace,” he said.

“I think our growth and our financial performance demonstrate that that is a successful formula.” Mr McEniry rejected a suggestion the company was only building 380s to specific order for fleet sales and said the mix of private sales was increasing.

“It is improving, we are getting up to the segment average,” Mr McEniry said, adding that a series of special editions with extra equipment had helped with non-fleet sales.

“Platinum got up to 65-70 per cent private penetration, so we are using these value packs to target private buyers and they are proving successful.” MMAL is also planning more updates past the current Series III 380 model. “The boot is quite wide, so there is plenty of room for other badges,” Mr McEniry said. “We do have a plan in place at the moment. I am not going to tell you all the details of the changes.” As revealed by GoAuto last month, MMAL is currently finalising electronic stability control (ESC) for its 380, which is expected to be added across the 380 range as soon as it becomes available around the middle of next year.

Mr McEniry said the company would not wait until for a model year upgrade to introduce ESC to the 380. “We will probably introduce ESC earlier than that change simply to get it into the market place as quickly as possible as it is one of our key platforms going forward for the total range,” he said.

Mr McEniry ruled out any new export potential for the 380 and added a plan to sell the sedan as a Proton in Malaysia was on hold. He said MMAL sold export models “only to our neighbours who are about as good as us at rugby (New Zealand)”. “They take about 50 month or somewhere around there, so it is very small,” he said.

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