Mitsubishi Motors to seek growth in China, U.S. as it moves on from scandal

Mitsubishi Motors to seek growth in China, U.S. as it moves on from scandal

KIM KYUNG-HOON

TOKYO (Reuters) - Mitsubishi Motors Corp said it plans to boost sales by 30 percent over three years, setting ambitious goals for growth in China and the United States as well as a comeback in Japan where has been hobbled by a mileage cheating scandal.

Under the new three-year plan - Mitsubishi's first since Nissan Motor Co Ltd bought a controlling stake last year in the wake of the scandal - the Japanese automaker will also ramp up R&D investment and capital spending as well, aiming for jump in profitability.

"This is an aggressive mid-term plan. Our highest priority is to rebuild trust in our company," Mitsubishi Chief Executive Osamu Masuko told a news conference.

"We must be careful not to become overconfident or careless about our reforms, so as not to derail our recovery," he said.

The smallest of Japan's major automakers, Mitsubishi has long focused its overseas strategy in Southeast Asia, its top market, where competition from other automakers has been less intense.

While the new plan calls for a 50 percent boost in sales in Southeast Asia, it also aims to more than double sales in China, where it has long been a laggard, and to lift sales by more than one-third in the United States.

Globally it is seeking a 30 percent increase in annual sales to 1.3 million vehicles, with a 40 percent climb in Japan.

Over the next three years, Mitsubishi plans to release 11 models, six of which will either be full model changes or brand new models. Beyond 2020, it will also launch an electric SUV, and an electric minicar in Japan.

As part of the alliance that includes Nissan and Renault SA , the automaker is also targeting cost-savings of more than 100 billion yen ($887.31 million) over the next three years due to development and procurement efficiencies.

That will help it in its new goal of reaching an operating margin of 6 percent or more from 0.3 percent currently. Increases in capital spending and R&D investment will amount to more than 600 billion yen over the duration of the plan.

Mitsubishi's efforts to move on from the scandal in which it admitted to falsifying fuel economy data come amid fresh revelations of misconduct at other Japanese firms.

Nissan said on Wednesday it conducted uncertified vehicle checks as recently as last week even after revealing the widespread misconduct at its domestic factories. Earlier this month, Kobe Steel admitted it had been falsifying data on product quality and client specifications.

Masuko said that tests conducted on bonnets used in its models which comprise aluminum supplied by Kobe Steel had shown no safety issues, adding that Mitsubishi was continuing to investigate parts procured by suppliers which contain materials affected by the issue.

(Reporting by Naomi Tajitsu; Editing by Christopher Cushing and Edwina Gibbs)

TOP READS FROM THE FISCAL TIMES