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The Mitsubishi Group (三菱グループ, Mitsubishi Gurūpu?), Mitsubishi Group of Companies, or Mitsubishi Companies is a Japanese conglomerate consisting of a range of autonomous businesses which share the Mitsubishi brand, trademark and legacy. The Mitsubishi group of companies form a loose entity, the Mitsubishi Keiretsu, which is often referenced in US and Japanese media and official reports; in general these companies all descend from the zaibatsu of the same name. A keiretsu is a common feature of Japanese corporate governance and refers to a collaborative group of integrated companies with extensive share crossholdings, personnel swaps and strategic co-operation. The top 25 companies are also members of the Mitsubishi Kin'yōkai, or "Friday Club", and meet monthly. The Mitsubishi .com Committee is meant to facilitate communication and access of the brand through a portal web site.
Mitsubishi Motors Corporation (三菱自動車工業株式会社, Mitsubishi Jidōsha Kōgyō Kabushiki Gaisha?) is the fifth largest automaker in Japan and the fifteenth largest in the world by global unit sales. It is part of the Mitsubishi keiretsu, formerly the biggest industrial group in Japan, and was formed in 1970 from the automotive division of Mitsubishi Heavy Industries.
Throughout its history it has courted alliances with foreign partners, a strategy pioneered by their first president Tomio Kubo to encourage expansion, and continued by his successors. A significant stake was sold to Chrysler Corporation in 1971 which it held for 22 years, while DaimlerChrysler was a controlling shareholder between 2000 and 2005. Long term joint manufacturing and technology licencing deals with the Hyundai Motor Company in South Korea and Proton in Malaysia were also forged, while in Europe the company co-owned the largest automobile manufacturing plant in the Netherlands with Volvo for ten years in the 1990s, before taking sole ownership in 2001.
Thanks to these alliances it benefitted strongly in the 1970s and '80s, increasing its annual production from 250,000 to over 1.5 million units. But its strong presence in south-east Asia meant it suffered more than most of its competitors in the aftermath of the 1997 East Asian financial crisis, and since then the company has struggled to consistently increase sales and maintain profitability.
Mitsubishi 's automotive origins date back as far as 1917, when the Mitsubishi Shipbuilding Co., Ltd. introduced the Model A, Japan's first series-production automobile. An entirely hand-built seven-seater sedan based on the Fiat Tipo 3, it proved expensive compared to its American and European mass-produced rivals, and was discontinued in 1921 after only 22 had been built.
In 1934, Mitsubishi Shipbuilding was merged with the Mitsubishi Aircraft Co., a company established in 1920 to manufacture aircraft engines. The unified company was known as Mitsubishi Heavy Industries (MHI), and was the largest private company in Japan. MHI concentrated on manufacturing aircraft, ships, railroad cars and machinery, but in 1937 developed the PX33, a prototype sedan for military use. It was the first Japanese-built passenger car with full-time four-wheel drive, a technology the company would return to almost fifty years later in its quest for motorsport and sales success.
A 1937 Mitsubishi PX33 on display at the Mondial de l'Automobile in September 2006.
Immediately following the end of the Second World War, the company returned to manufacturing vehicles. Fuso bus production resumed, while a small three-wheeled cargo vehicle called the Mizushima and a scooter called the Silver Pigeon were also developed. However, the zaibatsu (Japan's family-controlled industrial conglomerates) were ordered to be dismantled by the Allied powers in 1950, and Mitsubishi Heavy Industries was split into three regional companies, each with an involvement in motor vehicle development: West Japan Heavy-Industries, Central Japan Heavy-Industries, and East Japan Heavy-Industries.
East Japan Heavy-Industries began importing the Henry J, an inexpensive American sedan built by Kaiser Motors, in knockdown kit (CKD) form in 1951, and continued to bring them to Japan for the remainder of the car's three year production run. The same year, Central Japan Heavy-Industries concluded a similar contract with Willys (now owned by Kaiser) for CKD-assembled Jeep CJ-3Bs. This deal proved more durable, with licensed Mitsubishi Jeeps in production until 1998, thirty years after Willys themselves had replaced the model.
By the beginning of the 1960s Japan's economy was gearing up; wages were rising and the idea of family motoring was taking off. Central Japan Heavy-Industries, now known as Shin Mitsubishi Heavy-Industries, had already re-established an automotive department in its headquarters in 1953. Now it was ready to introduce the Mitsubishi 500, a mass market sedan, to meet the new demand from consumers. It followed this in 1962 with the Minica kei car and the Colt 1000, the first of its Colt line of family cars, in 1963.
West Japan Heavy-Industries (now renamed Mitsubishi Shipbuilding & Engineering) and East Japan Heavy-Industries (now Mitsubishi Nihon Heavy-Industries) had also expanded their automotive departments in the 1950s, and the three were re-integrated as Mitsubishi Heavy Industries in 1964. Within three years its output was over 75,000 vehicles annually. Following the successful introduction of the first Galant in 1969 and similar growth with its commercial vehicle division, it was decided that the company should create a single operation to focus on the automotive industry. Mitsubishi Motors Corporation (MMC) was formed on April 22, 1970 as a wholly owned subsidiary of MHI under the leadership of Tomio Kubo, a successful engineer from the aircraft division.
The logo of three red diamonds, shared with over forty other companies within the keiretsu, predates Mitsubishi Motors itself by almost a century. It was chosen by Yataro Iwasaki, the founder of Mitsubishi , as it was suggestive of the emblem of the Tosa Clan who first employed him, and because his own family crest was three rhombuses stacked atop each other. The name Mitsubishi is a portmanteau of mitsu ("three") and hishi (literally, "water chestnut", often used in Japanese to denote a diamond or rhombus).
Part of Kubo's expansion strategy was to increase exports by forging alliances with well-established foreign companies. Therefore, in 1971 MHI sold U.S. automotive giant Chrysler a 15 percent share in the new company. Thanks to this deal, Chrysler began selling rebadged Galants in the United States as Dodge Colts, pushing MMC's annual production beyond 250,000 vehicles. In 1976, the Galant was sold as the Chrysler Scorpion in Australia.
A 1973 Mitsubishi Galant, the basis for the company's first captive import deal with Chrysler.
By 1977, a network of "Colt"-branded distribution and sales dealerships had been established across Europe, as Mitsubishi sought to begin selling vehicles directly. Annual production had by now grown from 500,000 vehicles in 1973 to 965,000 in 1978, when Chrysler began selling the Galant as the Dodge Challenger and the Plymouth Sapporo. However, this expansion was beginning to cause friction; Chrysler saw their overseas markets for subcompacts as being directly encroached by their Japanese partners, while MMC felt the Americans were demanding too much say in their corporate decisions.
Mitsubishi finally achieved annual production of one million cars in 1980, but by this time its ally was not so healthy; As part of its battle to avoid bankruptcy, Chrysler was forced to sell its Australian manufacturing division to MMC that year. The new Japanese owners renamed it Mitsubishi Motors Australia Ltd (MMAL).
In 1982, the Mitsubishi brand was introduced to the American market for the first time. The Tredia sedan, and the Cordia and Starion coupés, were initially sold through 70 dealers in 22 states, with an allocation of 30,000 vehicles between them. This quota, restricted by mutual agreement between the two countries' governments, had to be included among the 120,000 cars earmarked for Chrysler. Toward the end of the 1980s, as MMC initiated a major push to increase its U.S. presence, it aired its first national television advertising campaign, and made plans to increase its dealer network to 340 dealers. By 1989, Mitsubishi 's worldwide production, including its overseas affiliates, had reached 1.5 million units.
Despite the ongoing tensions between Chrysler and Mitsubishi , they agreed to unite in a vehicle manufacturing operation in Normal, Illinois. The 50/50 venture provided a way to circumvent the voluntary import restrictions, while providing a new line of compact and subcompact cars for Chrysler. Diamond-Star Motors (DSM) — from the parent companies' logos: three diamonds (Mitsubishi ) and a pentastar (Chrysler) — was incorporated in October 1985, and in April 1986 ground was broken on a 1.9 million square-foot (177,000 m²) production facility. In 1987, the company was selling 67,000 cars a year in the U.S., but when the plant was completed in March 1988 it offered an annual capacity of 240,000 vehicles. Initially, three platform-sharing compact 2+2 coupés were released, the Mitsubishi Eclipse, Eagle Talon and Plymouth Laser, with other models being introduced in subsequent years.
Mitsubishi Motors went public in 1988, ending its status as the only one of Japan's eleven auto manufacturers to be privately held. Mitsubishi Heavy Industries agreed to reduce its share to 25 percent, retaining its position as largest single stockholder. Chrysler, meanwhile, increased its holding to over 20 percent. The capital raised by this initial offering enabled Mitsubishi to pay off part of its debts, as well as to expand its investments throughout south-east Asia where it was by now operating in the Philippines, Malaysia, and Thailand.
Hirokazu Nakamura became president of Mitsubishi in 1989 and steered the company in some promising directions. Sales of the company's new Pajero were bucking conventional wisdom by becoming popular even in the crowded streets of Japan. Although sales of SUVs and light trucks were booming in the U.S., Japan's car manufacturers dismissed the idea that such a trend could occur in their own country. Nakamura, however, increased the budget for sport utility product development, and his gamble paid off; Mitsubishi 's wide line of four-wheel drive vehicles, from the Mitsubishi Pajero Mini kei car to the Delica Space Gear passenger van, rode the wave of SUV-buying in Japan in the early to mid-1990s, and Mitsubishi saw its overall domestic share rise to 11.6 percent in 1995.
In 1991, Chrysler sold its equity stake in Diamond-Star Motors to its partner, and from then on they continued to share components and manufacturing on a contractual basis only. Chrysler decreased its interest in Mitsubishi Motors to less than 3 percent in 1992, and announced its decision to divest itself of all its remaining shares on the open market in 1993. The two companies nevertheless continued their close alliance, with Chrysler supplying some parts for engines and transmissions for DSM, and Mitsubishi marketing Chrysler products overseas.
DSM was officially renamed Mitsubishi Motor Manufacturing of America on July 1, 1995, and Mitsubishi Motors North America, Manufacturing Division in 2002.
Two years after the merger of Daimler and Chrysler to form DCX, the U.S.-German conglomerate paid US$1.9 billion for a controlling 34 percent of MMC, in an effort to fulfil chairman Jürgen Schrempp's vision of a "Welt AG" ("world corporation"). The price reflected a US$200 million discount on the originally agreed figure, caused by the public disclosure of the defect cover-up scandal. In March 2001 it increased its stake to 37.3 percent when it acquired Volvo's stake in MMC's truck-making operations, further boosting Mercedes' share of a market it already dominated. However, boardroom wrangles at DCX prevented them offering financial assistance as Mitsubishi attempted to reduce its crippling debts. When a US$4 billion rescue package was agreed with Tokyo-based Phoenix Capital in May 2004, DCX's stake was reduced to 23 percent, and further recapitalisations subsequently diluted the holding to 12.4 percent. Finally, on November 11, 2005, the remaining stock was sold for US$1.1 billion — an US$800 million loss in five years. Three days later the buyer, investment bank Goldman Sachs sold the shares on for US$80 million profit.
New major stockholder Phoenix Capital followed suit the following month, selling all but 50 million of its 575 million shares to JPMorgan on December 9, 2005. Once again, the investment bank offloaded their purchase within a few days for tens of millions in profit. In both cases, the eventual buyers were part of the Mitsubishi keiretsu, returning MMC to Japanese ownership.
Mitsubishi has almost half a century of international motorsport experience, predating even the incorporation of MMC. Beginning with street races in the early 1960s, the company found itself gravitating towards the challenge of off-road racing. It dominated endurance rallies in the 1970s, the Dakar Rally from the '80s, and the Group A and Group N classes of the World Rally Championship through the '90s. Ralliart is Mitsubishi 's Motorsport subsidiary.
Circuit racing
Mitsubishi 's motorsport debut was in touring car racing in 1962, when it entered its Mitsubishi 500 Super DeLuxe in the Macau Grand Prix in an effort to promote sales of its first post-war passenger car. In an auspicious debut, the diminutive rear-engined sedan swept the top four places in the "Under 750 cc" category, with Kazuo Togawa taking class honours. The company returned the following year with their new Colt 600 and again swept the podium with a 1–2–3 in the "Under 600 cc" class. In its final year of competition with touring cars in 1966, Mitsubishi scored a podium clean sweep in the "750–1000 cc" class of the 1964 Japanese Grand Prix with the Colt 1000, their first front-engined competition vehicle.
The company began concentrating on the Japanese GP's emerging open-wheel "formula car" categories from 1966, winning the "Exhibition" class. They also scored class 1–2 in 1967 and 1968, and reached the podium in 1969 and 1970. They finished on a high with an overall 1–2 in the 1971 Japan GP, with the two litre DOHC F2000 driven by Kuniomi Nagamatsu.
Off-road racing
Mitsubishi Lancer 1600 GSR.
The East African Safari Rally was by far the most gruelling event on the World Rally Championship calendar in the 1970s. MMC developed the Lancer 1600 GSR specifically for the marathon race, and won at the first attempt in 1974. Their highpoint was a clean sweep of the podium places in 1976 in an event where only 20 percent of the starters typically reached the finish. They also achieved a 1–2–3–4 in the 1973 Southern Cross Rally, the first of four consecutive victories in this event with drivers Andrew Cowan and Kenjiro Shinozuka.
Mitsubishi Lancer WRC05.
During the 1980s Mitsubishi continued to participate in the WRC, first with the Lancer EX2000 Turbo and the Starion. It then scored its first outright Group A victories with a Galant VR-4 in the late '80s, Mitsubishi homologated the Lancer Evolution, and in the hands of Finland's Tommi Mäkinen, winner of the drivers' title for four consecutive years (1996–1999), they won the manufacturers' championship in 1998. They have won 34 WRC events since 1973. The Lancer Evo has also dominated the FIA championship for showroom-ready cars, winning seven consecutive Group N titles with four different drivers from 1995–2001. Even in 2002 when it ostensibly lost the title, the class-winning manufacturer was Proton using a Lancer Evo-based Pert.
Mitsubishi is also the most successful manufacturer in the history of the Dakar Rally, one of the most challenging and dangerous motorsport events in the world. MMC's maiden entry was in 1983 with their new Pajero, and it took only three attempts to find a winning formula. Since then, they have won in 1992, '93, '97, '98, and '01–'07, an unprecedented seven consecutive victories and twelfth overall with nine different drivers. Mitsubishi Motors UK also won the British Rally Championship drivers (Guy Wilks and in 2000 Marko Ipatti) and teams titles in 2007 with the Group N Lancer Evolution IX.
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