Restrictions on mobility and stagnation in economic activity in each country associated with the prevention of the spread of COVID-19 have had a significant impact on automobile demand. The various restrictions of each country are gradually eased, but the expansion of the second wave and the arrival of the third wave are expected in the future, and the path to recovery is not easy. It is assumed that it will take a certain amount of time for economic activities to completely return to the pre-corona level.
In this difficult situation, in other to secure stable earnings in the future, MITSUBISHI MOTORS CORPORATION (MMC) announced its three-year mid-term business plan (from fiscal 2020 to 2022), Small but Beautiful, to concentrate its management resources on its core regions and products based on the pillar of selection and concentration.
This plan focuses on cost reforms and profitability reforms, which are structural reforms to stabilize the operating base, in order to realize sustainable growth for the company after the plan period. To this end, we will shift our strategy from all-round expansion to accelerate selection and concentration. On that basis, we will complete our structural reforms and further strengthen our competitive areas, thereby realizing the transition during this plan period to a structure that can steadily generate profits.
Specific initiatives include reviewing our production capacity, sales organization structure and product lineup, as well as significantly reducing fixed costs. After ensuring that these initiatives are fully implemented, MMC will concentrate its resources on the ASEAN region where it is competitive. In addition, MMC will expand its profitability by enhancing its proprietary environmental technologies such as PHEV and HEV, as well as its 4WD technologies, and by introducing cutting-edge models leveraging the Alliance partners' technologies. By integrating those technologies, MMC will launch environmentally friendly models that contribute to developing a society where people, cars, and nature can coexist in harmony.
The main actions of this plan are as follows:
- Reducing fixed costs by 20 percent or more compared to FY2019, and concentrating investment on core regions and technologies to enhance profitability
- Focusing management resources on ASEAN, and increasing the market share there to more than 11 percent
- Developing businesses in Africa, Oceania and South America as the second pillar following ASEAN
- Strengthening the eco-friendly model lineup such as PHEVs and EVs by launching new models by FY2022, and introducing new models including SUVs, pickup trucks and MPVs in ASEAN from FY2022 onwards