Mitsubishi 2005 Annual Report Download - page 28

Annual Report 2005
26
MITSUBISHI MOTORS CORPORATION
Net Sales
(¥ billion)
Unit Sales
(Thousand units)
0
500
1,000
1,500
2,000
-40
-20
0
20
40
60
80
100
05 06 07 08 05 06 07 08
0
200
400
600
800
1,000
1,200
05 06 07 08
Plan* Plan* Plan*
Strengths and Issues in Overseas Markets
Overseas operations will have a significant bearing on the
outcome of the Mitsubishi Motors Revitalization Plan as
this segment represents approximately 80% of consoli-
dated net sales. MMC has a long history in the ASEAN
region and other Asian markets, in particular. For
example, in Indonesia, the history of Mitsubishi Motors,
centered on commercial vehicles, dates back some thirty
years. In these regions, the Mitsubishi Motors image of
durability and reliability has thoroughly penetrated the
markets, enabling MMC to consistently generate high
earnings, especially in the ASEAN region.
However, looking at overseas markets on the whole,
MMC has struggled to generate sufficient sales volumes to
recoup investments made as part of past efforts to actively
expand local production.
Keys to Revitalization: Reestablish MMC in the North American Market and
Achieve Steady Growth in All Markets
In overseas operations, a key requirement for revitalizing MMC is to jump-start
operations in the North American market, where MMC has struggled due to its
previous over-ambitious sales growth strategies. On the other hand, Mitsubishi
vehicles continue to enjoy an image of durability and reliability and are firmly
trusted by customers in many regions worldwide. While preserving these assets
and further enhancing quality under an optimal global production network, we
will leverage our strengths and focus on markets where we are competitive. I
believe this will ultimately pave the way for long-term growth.
Hiroshi Harunari
Managing Director
In Charge of Overseas Operations Group Headquarters
«Overseas Operations»
Operating Profit (Loss)
(¥ billion)
*MMC revised its targets for fiscal 2005 when it released its fiscal 2004 full-year financial results on May 23, 2005. Targets
for fiscal 2006 onwards are those announced in the Mitsubishi Motors Revitalization Plan on January 28, 2005.
Rebuilding Operations in Unprofitable Regions and
Building on MMC’s Strengths
As part of the revitalization plan, MMC will rebuild opera-
tions in regions where it has fallen into the red, while
launching attractive new models in all markets. At the same
time, efforts are being made to enhance models and
operations in regions where MMC can exert its strengths.
Specifically, MMC has already booked substantial impair-
ment losses, reduced headcount and taken other actions in
North America and Australia, where overcapacity was an
issue. With these steps, MMC has achieved a sharp
reduction in fixed costs and a lower breakeven point.
The key themes in each region are as follows: establish a
profitable operating structure in North America, achieve
commercial viability and growth in Europe, actively leverage
the strong Mitsubishi brand in China, and further reinforce
sales capabilities in the ASEAN region. Looking ahead, MMC
will implement various initiatives to achieve these goals.