Mitsubishi 2005 Annual Report Download - page 55

53
MITSUBISHI MOTORS CORPORATION
Annual Report 2005
Financial Section
(iii) Business tie-up strategy
To further promote a policy of selection and concentration, MMC group will actively pursue strategic tie-up opportu-
nities with other automakers. One example is the announcement made in January 2005 relating to the expansion of
the supply of minicars on an OEM basis to Nissan Motor (36,000 units annually). In February 2005 MMC and
Peugeot-Citroen Group (PSA) reached to the agreement where MMC group supply passenger cars to PSA on an OEM
basis. (MMC is expected to sign the final contract in the first half of fiscal 2005.)
MMC group is looking for other tie-ups such as an expanded range of models supplying on an OEM basis,
component supply partnering, joint distribution arrangements and joint procurement.
(iv) Regional strategy
A.JAPAN
Driving towards a group structure that returns stable profits, MMC and its sales companies will continue to work
hand in hand to regain the trust of customers with additional measures that follow on from the free inspection
campaign covering 3.4 million owners. MMC group will also restructure its sales network and will drive to maximize
after-sales services.
B.NORTH AMERICA
North America remains a vital core market for MMC group. To put its operations in that market on a profitable basis,
MMC group will rebuild its brand through the introduction of a new management structure, with new model launches and
by cutting back on its dependence on fleet sales. It is also going to raise capacity utilization by expanding exports of
locally built cars. Further, impairment loss is recognized for the excess of plant capacity in 2004.
MMC group is currently addressing the U.S. captive financing unit that sparked the problems in MMC group’s
North American operations. It is currently reducing its exposure to loan default risks by selling off a portion of its
financing asset holding to Merrill Lynch. MMC group also plans to establish a new joint venture company with
Merrill Lynch for the purpose of creating competitive and attractive consumer financing programs.
C.EUROPE
To move its European operations forward from the stage of achieving profitability to the growth stage, MMC group will
work to promote sales around a stronger model lineup and will push forward its efforts to strengthen its management
and sales structures.
D.CHINA
Positioning China as a core market, MMC group is aggressively exploiting the Mitsubishi brand, which is currently strong
and healthy in China, and expanding its operating base. In addition to expanding the range of Mitsubishi brand models
available by boosting capital tie-ups with local companies, MMC group is also pushing forward with efforts to establish
and to expand its sales network. MMC group is looking for using its engine joint ventures in the country to make China a
major engine production hub in Asia, and is going to establish R&D facilities in the country to meet local market needs
in its products on a timely basis.
E.OTHER MARKETS
MMC group is taking steps to strengthen its operational footing in ASEAN markets. These include strengthening sales
in Thailand, establishing sales structures in Malaysia and reorganizing its operations in Indonesia. MMC group is also
strengthening its production base by boosting capacity in Thailand, which serves as an export hub to global markets.
As for Australia, MMC group is on track to close its engine plant and downsize its assembly plant. MMC group
has also recognized impairment loss for the excess of plant capacity.