Mitsubishi 2011 Annual Report Download - page 11

From FY2011
n Supplement product/technology to better fulll customer needs
n Improve efciency/capacity utilization at factories
n Cost reduction in R&D expenditure, xed expenses, facility investments, etc.
l PSA Peugeot Citroën: Compact SUV l Nissan Motor: SUV for Middle East market
l Nissan Motor: Compact commercial car l Suzuki: compact passenger car
l PSA Peugeot Citroën: Production of commercial EV to begin around end of 2012
l Nissan Motor: Collaboration on development and production of successor to one-ton pickup truck, receipt of
high-end sedan model for Japanese market
Alliance Strategy: Pursuing Business Alliances
Increasing Profit-Earning Opportunities / Bolstering Profitability
Models Provided
Models Received
EV Development
l Nissan Motor: Formation of joint venture for minicar product planning/development
Minicar Business
l Nissan Motor: Collaborating in Nissan pickup truck production in Thai factory
OEM Production
Under Deliberation
> Reform our cost structure to achieve cost
competitiveness on a global level
Boosting our global competitiveness by radically reforming our
cost structure and significantly lowering costs is our topmost
priority. Therefore, we will move forward on initiatives that go
beyond our previous efforts.
With materials prices expected to remain high, first we will
create a special department for accelerating cost reductions
under the direct control of the president. This new team will put
in place a system to monitor MMC’s reduction of materials cost
and follow up on a regular basis.
As raw materials cost constitutes a high proportion of
overall costs, by fiscal 2013 we aim to bring this spending down
by ¥90.0 billion from the fiscal 2010 level. To this end, we will
work to expand procurement from overseas suppliers, centering
on China, South Korea and Thailand, creating an optimal global
procurement structure that will help to counter the effects of
yen appreciation. By fiscal 2013, we expect to raise our overseas
procurement ratio from 18% to 25%. In addition, by enhancing
collaboration with our overseas production hubs we will be able
to select the best local suppliers for vehicles made on common
platforms, such as the Lancer and the Outlander. This measure
should allow us to cut materials costs for the C-segment plat-
form by 15%. By the end of fiscal 2013, we plan to reduce the
number of platforms from 12 to nine, dropping further to six by
the end of fiscal 2015. By doing this, the production volume per
platform should double fiscal 2010 levels by the end of fiscal
2013. The increased economies of scale resulting from the
increase of shared parts across models will reduce materials costs,
raise productivity and allow us to curtail development costs.
> Pursue further pro t through alliances
Through alliances, we aim to supplement our products and
technologies, improve capacity by increasing operating ratios,
and reduce R&D expenditures, fixed costs and capital expenditures.
Among our new alliances are the OEM provision of our com-
pact SUV to PSA Peugeot Citroën, along with collaborative develop-
ment and component provision to convert PSA Peugeot Citroën’s
commercial vehicles to electric vehicles. As we already have OEM
agreements in place with PSA Peugeot Citroën and are working
with them on joint production in Russia, PSA Peugeot Citroën will
become an even more important partner for MMC. In addition, in
June 2011 we established a joint venture with Nissan Motor to plan
and develop minicars. We plan to expand the number of models
that we provide each other on an OEM basis. Furthermore, we have
an agreement with Suzuki Motor in which they provide us with a
compact passenger car, sold as the Delica D:2.
We intend to move ahead with business alliances of this
sort, as they benefit both parties by increasing profit-generating
opportunities and bolstering profitability.
MITSUBISHI MOTORS CORPORATION
Annual Report 2011 9