Mitsubishi to Close Australian Manufacturing Plant
By Chris Haak
Mitsubishi Motors Corporation announced this morning that it is closing its Australian subsidiary’s Adelaide production facility effective March 31. This was Mitsubishi’s only assembly plant in Australia, and the company now expects to pursue a “full import” strategy for Australia.
In 2007, production at the plant was down to just 10,942 units, so many were questioning its long-term viability, in spite of vigorous denials on the part of management that the plant would be closing as recently as late 2006. The only vehicle built in the plant was the Mitsubishi 380, which was based heavily on the US Galant, but received several modifications to make the car more appealing to Australian consumers. Unfortunately for Mitsubishi Australia, the 380 was a sales flop almost from the day it hit the showroom floor in late 2005. The car was planned early in the decade, before high gas prices led a consumer shift away from large sedans. The launch of the Toyota Aurion and Holden VE Commodore in the past few years couldn’t even stem what turned out into a 37% decline in large car sales in 2005 and 2006. Compounding the problems were currency issues – specifically the strength of the Australian dollar – as well as the lack of exports. Mitsubishi Australia tried to get another product for the plant that could be exported elsewhere, but was unsuccessful.
When the 380 hit the ground with a thud, Mitsubishi Australia tried repackaging the car into different trim levels and significantly cutting prices – in some cases more than 10%. Even moves like that failed to stimulate sales.
The plant’s closure will affect close to 1,000 jobs. Affected individuals will receive severance pay and benefits. Some analysts have questioned the viability of Australian vehicle production, but Mitsubishi pointed out that its exit does not necessarily signal the end; in fact, the shuttering of its factory represents only about 2% of Australian local production. Still, this news isn’t good for Australia, Mitsubishi, or their employees.
The company is immediately adding an extra year to the warranty coverage of 380s already sold, and emphasized that it would not be withdrawing from the Australian market. In fact, they plan to launch seven new models this year.
For an excellent article about this story from GoAuto in Australia, click here.
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