Currently reading: Updated: Mitsubishi freezes introduction of new models for Europe
Firm shifts focus to more profitable South-East Asia, suggesting gradual withdrawal from Europe
Felix Page Autocar writer
News
3 mins read
28 July 2020

Mitsubishi has halted new model launches in Europe as part of an overhaul of its global operations to cut costs, which is expected to mark the beginning of the brand's withdrawal from the European market.

Under the 'Small but Beautiful' banner, the Japanese manufacturer plans to reduce its fixed costs by 20% over the next two years. It will shift to a business structure centred on Asia and "improve operating profit by downsizing low-profit businesses”. 

The firm will focus its resources on the South-East Asian market, where it currently has a 6.4% market share, compared with just 1.0% in Europe and 0.9% in North America. Its operating profit in the region last year was 63.6 billion yen (£469.6 million), compared to just 12.8bn yen (£94.5m) across all other global markets.

A planned “freezing of the introduction of new products in Europe” means upcoming models such as the next-generation L200 pick-up truck, Outlander SUV and Mirage supermini are unlikely to be sold here. 

Car Dealer Magazine reports that Mitsubishi UK boss Rob Lindley was surprised to hear the news, but that the Colt Car Company - sole distributor of the brand’s models in the country - will now "accelerate" talks it was already having with other manufacturers. 

"We did not expect [Mitsubishi] to cease development of models for Europe completely and that was a shock," Lindley told Car Dealer, "but we were talking to other brands that are not yet represented here in the UK yet."

It is not yet known which brands are in line to fill the gap left by Mitsubishi's departure, but Lindley hinted that "if a brand is importing cars to Australia then they are a good fit for the UK as they are right-hand drive and crash tested to similar standards". It is suggested he is referring to top-selling Chinese brand Haval, which announced plans for a global rollout in 2017. 

A Mitsubishi UK spokesman was unable to say for how long the European new model freeze will last but said that the situation is “evolving and changing rapidly”.

Mitsubishi plans to achieve “sustainable growth” from the end of 2022 by consolidating investment into core regions and products. Changes in its home market include shifting production of its Pajero SUV from Sakahogi to Okazaki, closing unproductive dealerships and promoting its sharing and subscription business. 

The spokesman told Autocar that it's too early to say what the plans mean for Mitsubishi's 114 UK dealerships but that they're “still selling cars for the foreseeable future” and plan to continue to support customers with an ongoing aftersales parts and servicing offering. 

However, the new model freeze means current models will not be replaced when they become non-compliant with EU emissions regulations, suggesting Mitsubishi will gradually withdraw from the European market. 

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Takao Kato, representative executive officer and CEO of the Mitsubishi Motors Corporation, said: “We will shift our strategy from all-round expansion to selection and concentration. First of all, we will complete our structural reforms and further strengthen our competitive areas – ultimately to build a corporate structure that can surely generate profits during this mid-term period." Further details on what this means for the struggling Renault-Nissan-Mitsubishi Alliance are unclear, but Mitsubishi has confirmed plans to continue introducing “cutting-edge models leveraging the Alliance partners’ technologies”. As part of its future models preview, the firm listed an electric kei car that it's co-developing with Nissan for launch after 2022. 

Recently announced plans for the three Alliance brands to increase their sharing of technology and production are estimated to cut model development costs by up to 40%. As part of the revised structure, Renault has been named the lead brand in Europe, with Nissan taking the lead in Japan, North America and China and Mitsubishi the focus for South-East Asia and Oceania. 

Nissan will continue to sell a limited number of successful models in Europe, but such a move would be less beneficial for Mitsubishi, given its smaller size. 

Read more

Renault, Nissan and Mitsubishi to increase technology sharing​

Mitsubishi plans new SUV strategy​

Mitsubishi Outlander PHEV review

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Comments
20

27 July 2020

I think the same thing will (sadly) happen with Suzuki: The model range is getting less and less, and it makes you wonder how long the re-badged Toyota models will last on sale.

27 July 2020
catnip wrote:

I think the same thing will (sadly) happen with Suzuki: The model range is getting less and less, and it makes you wonder how long the re-badged Toyota models will last on sale.

There are 2 vehicles I am interested in but the recent new versions don't have an auto choice so I can't buy one, a couple of other possibilities don't do auto's with the engine I want either.

Your right, its getting harder and harder to find what you want.

289

27 July 2020

Very sad catnip.

Some of the loveliest people work at Mitsubishi UK in Cirencester.

Sadly, I cant see much of a future for Subaru or Honda in the UK....range too small and direction of development almost irrelevant in the UK.

27 July 2020

I am sure Mitsubishi dealers will be 'delighted' by this!  stabbed in the back..

As a small brand here the dealers had to cope with shell shock when they went from selling a few quirky vehicles and pickups to builders - into the crazy success the PHEV bought, they were just not ready for a large fleet customer base. To their credit, the ones I used did in time step up substantially, although the experience was never near as slick as you get at many other brands, but often refreshingly simple and honest. All the fluff and bluster that goes with just a simple service from some other brands is too much, do I really need an online video of my oil change or follow up calls to check its all well (who wouldn't go straight back if the car was faulty!). None of that nonsense with Mitsubishi.

27 July 2020

Mitsubishi seems to been in decline for the past couple of decades,it's overseas manufacturing plants have been closed in Australia(2009),Europe(2012) and USA(2015) so something is going seriously wrong .I'd suspect that if they do stay in Europe that they will be rebadged Nissans so perhaps the ASX & Qashqai lines will be merged likewise the Outlander and X-Trail,the pick-up's L200 & Navarra are also another target for removing duplication as well. Although Mitsubitshi's output in vehicles has largely pedestrian they did produce tough reliable vehicles and that the company's possible departure from the European market will further reduce choice for drivers

27 July 2020

I can't see them selling cars in the Uk in particular due to right hand drive and even Europe in the short term the same thing goes for Honda when they leave the uk will shortly follow the demise of Swindon production.They will lose a lot on depreciation,insurance go up due to parts etc.

27 July 2020
Ski Kid wrote:

I can't see them selling cars in the Uk in particular due to right hand drive and even Europe in the short term the same thing goes for Honda when they leave the uk will shortly follow the demise of Swindon production.They will lose a lot on depreciation,insurance go up due to parts etc.

289

27 July 2020

Why do you say "cant see them selling cars in the UK due to Right hand drive" Ski Kid?

You do realise that Japan drives on the same side of the road as us dont you?!

27 July 2020

Japanese right hand drive cars or left hand have to undergo an I.V.A test to comply with Eu and Uk laws tried to paste it in but would not work ,for emaple the Japanes ealthough right hand drive have different specs ie mileometer is metric not in milesand mph and some electrics I believe.You only have to look at some importers sale sand think that with the comlexity of testing and complying with the new co2 requirements it is too much of a problem both financially and manpower ,labs to undertake ,hence the cull on ranges that will take place soon.Renault starting soon.3 door cars not replaced etc never minfd small volumes of imported cars ,they mus tsell hundreds of some models ove rthe year ,not worth the bother ,even Suzuki stopping many rangeslike Jimny. 

27 July 2020

Europe is a very unfriendly place to sell cars if they are not your major marketplace. The Focus on CO2 here is far more than the rest of the world. Why would a maker with small volume go to the expence of engineering cars to sell here when they can sell their stuff far more easily and profitably in other parts of the world. 

Suzuki, and Subaru to follow them out of Europe soon, followed by Honda. Probably leaving just Toyota selling Japanese cars in the EU, and Nissan selling a few rebadged Renaults

 

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