Mitsubishi 2004 Annual Report Download - page 18

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OVERVIEW
As efforts to rebuild MMC’s European operations took hold in fiscal 2003, performance in this region steadily
improved, posting a profit on a consolidated basis for the first time since the Company’s founding. In addition, our
Chinese and ASEAN operations posted solid results. However, North American (U.S.) sales and sales financing
subsidiaries posted a major loss that far outweighed the income generated in other regions, and overseas operations were
unable to make a contribution to the Company’s performance. Affected by the significant decline in the number of
vehicles sold in North America, overseas operations overall posted a year-on-year decline of 4.5%, or 55,000 vehicles, to
1,168,000 vehicles.
Our policy of emphasizing North American (U.S.) vehicle sales based on volume over a short-term perspective
resulted not only in substantial losses, but also in damaging the image of the Mitsubishi Motors brand. The Company
placed excessive reliance on fleet sales and incentive marketing, and offered a financing program that entailed insufficient
risk analysis. Our strategy in the U.S. market had the effect of driving down used car prices, which had an adverse effect
on new car sales, further damaging the image of the Mitsubishi Motors brand. This became a vicious circle.
One of the principal causes of this sort of vicious circle was a system that did not allow headquarters personnel in
Japan to grasp overseas operations in detail, while decisions were left entirely in the hands of overseas managers. From a
governance standpoint, it cannot be denied that this was a problem.
In a sweeping response to this situation, the Company launched a new system in June, and implemented innova-
tive policies with regard to the organizations engaged in overseas operations. In specific terms, directly reporting to the
Overseas Operations Group Headquarters are five offices (North America, Europe, North Asia, ASEAN, and Global
Aftersales) and six departments (Australia/New Zealand; Latin America, Middle East & Africa; Export Operations;
Overseas Product Marketing; Overseas Sales Promotion; and Overseas Asset Management). In addition to clarifying the
performance and operational responsibilities in each region, Company headquarters has shifted to a structure that
allows control of each facet of overseas operations. In an effort to emerge as an organization with improved governance
and faster decision-making, internal communications are being improved. As part of this, Export Operations, Overseas
Product Marketing, Overseas Sales Promotion and Overseas Asset Management, which have regional strategy support
functions, now come under Overseas Operations Group Headquarters.
REGIONAL STRATEGIES
MMC’s fundamental policies for its overseas operations will be one of market orientation—that is, of listening to cus-
tomers and sales agents and ensuring that our products reflect feedback from the frontline. In addition, the Company
OVERSEAS OPERATIONS
Guided by its new management structure, the
Company is unified in its commitment to implementing
the strategies in each of its overseas operating regions
in an effort to swiftly realize revitalization.
OSAMU MASUKO
Managing Director
Executive Corporate General Manager of Overseas Operations Group Headquarters
and Corporate General Manager of ASEAN Office