Automotive News - November 17, 2008 - (Page 24) 24 • NOVEMBER 17, 2008 TA L K F R O M T H E T O P Masuko: Mitsubishi needs smaller U.S. lineup hen Osamu Masuko took the helm of Mitsubishi Motors Corp. in 2005, the company was battered by years of losses. Last year, Masuko led Mitsubishi to a record operating profit. But now the global financial meltdown threatens the comeback. Masuko knows that rolling out more small, fuel-efficient cars with global appeal is the best way to weather the storm. Speaking through an interpreter, Masuko, 59, talked with Asia Editor Hans Greimel about the outlook for the global economy, Mitsubishi’s plans for electric vehicles and its U.S. lineup. These are tough times for the industry. What is Mitsubishi’s outlook? With regard to the first six months, we have reached our target and we are very happy. But as for the environment, it’s becoming very difficult, and the second half will be very tough. So what we have to do for a while is endure. What’s important for us is that gradually there’s going to be an economic recovery, so we have to be prepared for that. How is the sudden downshift in the global economy affecting Mitsubishi’s Step Up 2010 midterm business plan? You had hoped to double net income in three years, but you already have downgraded your earnings forecasts for this fiscal year. We need not change the positioning of Step Up 2010. We have to accept the fact that the economic environment is changing dramatically. The biggest factor of change will be foreign exchange, so we have to be very flexible in our business model. That is, we have been exporting to Europe from Japan because there was a cost advantage in the past. But that might not be the case because of the depreciation of the euro toward the yen. So maybe we have to buy from somewhere else and not do exports from Japan to Europe. Mitsubishi is banking heavily on environmentally friendly technology such as electric drivetrains. Your i MiEV electric vehicle goes on sale next summer in Japan. Would you give a quick update on its debut and sales targets for the United States and Europe? In Japan for the fiscal year 2009, our target is 2,000 units. At the same time, we are going to be conducting driving verification tests in the United States and Europe. It will also be done in the Southern Hemisphere in Singapore and New Zealand. A left-hand-drive vehicle will be introduced in the summer of 2010, so we will be able to export a left-handdrive version after that. Our sales volume plan for 2010 is 4,000 units, and from 2011 onward it’s about 8,000 to 10,000 units globally. The first 2,000 units will be almost entirely from Japan. As for the United States, we haven’t decided on the sales timing, but it will happen after we start left-hand drives. What kind of other electric models does Mitsubishi have in the works? W Osamu Masuko What is your forecast for global demand for electric vehicles? When our electric vehicle debuts next summer and people see it running around the city, it will be highly evaluated. There’s no noise, no smell, no emissions. When you think about the entire industry, it’s not difficult to imagine 10 percent to 20 percent of cars being electric. YURIKO NAKAO/REUTERS We are also developing an electric vehicle for commercial use — for delivery, cargo, luggage or transport. We expect volume to keep growing by catering to these commercial needs. We have actually not shown or disclosed this commercial vehicle yet, but we would like to do so in the very near future. We intend to take this worldwide. There’s a global need for commercial vehicles for small shops and delivering mail or packages. Is the commercial vehicle based on the i MiEV? Yes, it’s the same platform. Only the top body is different. We are able to launch it in the same time frame as the i MiEV, but there is one problem. We said we will be selling 2,000 electric vehicles next year, but this is because of the capacity of battery production. But we have a lot of inquiries about the electric vehicle, so I don’t know how much we would be able to allocate to the commercial vehicle. What are your plans for plug-in hybrids? I think there are two ways of getting to plug-in hybrids. One is from hybrids into plug-ins. But what we are doing is from electric vehicles to plugin hybrids. We’re not going to take the interim step of hybrid vehicles. Our image of a plug-in hybrid is very close to that of an electric vehicle. The purpose of the engine is to provide power for the battery. So when you talk about the hybrid vehicle running, it’s actually running on batteries and motors. We have to mature the electric-vehicle base before expanding into plug-in hybrids, but we will be developing plug-ins in parallel with electric vehicles. What are Mitsubishi’s plans for its Normal, Illinois, plant? It will be open for another four years but is still not operating profitably. Until now, we thought it was the right way to actually manufacture big, D-segment vehicles like the Galant or Endeavor in the United States. But because of the fluctuation in oil prices as well as concerns about environmental issues and the financial crisis, the trend has changed. American consumers are more geared toward smaller vehicles all of a sudden. I don’t think this trend will change. We have to think about what we’re going to be manufacturing. We cannot think about extending our business as it is right now because we won’t be able to secure the volume we want in the U.S. Our biggest interest right now is in manufacturing small vehicles. Are you thinking about introducing new vehicles to tap that demand for small cars? The criterion will be if it’s a vehicle that can be sold on the global market. We don’t have any concept of strategic regional vehicles. We have done away with that, and we’re trying to produce global vehicles. As for manufacturing in the United States, not only should the vehicle be sold in the United States, it should be a global product. Is there a possibility of bringing Lancer production to the United States? We haven’t decided on that yet, but to do the Galant again in the United States is not realistic. Not actually stopping production of the Galant, but a vehicle the size of the Galant as a successor model or next generation for the United States, maybe that’s not realistic. We haven’t decided to manufacture the Outlander or Lancer in the United States, but to manufacture core models in the United States makes sense. Are you looking at the Illinois factory as a potential export hub? Yes. We already have experience in that. We’ve exported the Galant to Russia, the Ukraine, the Middle East and Latin America. We’re going in that direction with the Eclipse, too. We’re studying a lot of possibilities at the moment. What is your forecast for total U.S. market volume this year? A lot of people say 13 million units. Of course, the U.S. market is the world’s biggest, and it has a very important strength — that is, the population is increasing. Among the developed world, you don’t see many countries in which the population is increasing. So I’m sure there will come a time when it’s back to 16 mil- lion or 17 million. Do you think 2009 will be worse than 2008? I don’t know if things will be worse in America next year. But concerning a global economic recovery, I think people will start feeling that not next year but maybe in 2010. What do you think of the U.S. government’s guaranteed loans to American car companies? Do you think it’s fair? Let me first say, a few years ago we were in a very difficult situation as a company, but we have recovered to this level without any support from the government. But I sincerely hope these three American manufacturers will recover soon. I don’t think it’s unfair for the government to support them. It will probably be short-term, not long-term. I think it’s a good idea. How worried are you about a backlash against Japanese automakers if one of your big American rivals goes bankrupt? In the past, Japanese companies were criticized for their market share in America, and one had to engage in self-regulation. But the economy is a market economy. People should be allowed to compete freely. Otherwise, we can’t have healthy companies. Customers will also suffer. Does Mitsubishi have any plans to apply for the emergency loans? We don’t have any plans to do that. c
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