Finally, here’s some good news for the beleaguered three diamond company. Mitsubishi announced that it has commenced production of the 2013 Outlander Sport at the Normal, Ill. plant. Prior to the 2013 model year, the Outlander sport was built in Japan, where the strong yen has made the export of new vehicles (and in particular, low-cost ones) a money-losing venture. What’s more, Mitsubishi will be devoting about half of the plant’s production to overseas export markets. The weak dollar makes it more effective to build things in America than in most other places.
Poor Mitsubishi Motors. Unlike fellow unloved Japanese car brand Suzuki, Mitsubishi can’t point to automotive success in another market (like the wildly successful Maruti Suzuki joint venture in India that leads the market) or to a lineup of motorcycles that are far more loved than your cars. Mitsubishi’s plant in Normal, Illinois (which had previously been operating as a joint venture with Chrysler back in the 1980s and 1990s to build the Eagle Talon/Plymouth Laser/Mitsubishi Ecliips triplets) has been operating far below its peak capacity for years as buyers abandoned the brand in droves.
The export plans will help boost the fortunes of what had been the most underutilized auto plant in America. Production in 2011 was just 31,000 units, while in the plant’s heyday with multiple shifts running two lines, it produced 200,000 vehicles per year. With improving sales and the production destined for export, Mitsubishi expects 2012 production to top 50,000 units, which would be a healthy 61 percent increase over the depressed 2011 number. Eventually, the company expects the plant to produce 70,000 vehicles per year. That’s a low number by current auto plant standards (most other OEMs would close a plant at that volume, and certainly wouldn’t open one to produce just 70,000 cars per year), but that’s apparently 100 percent of the facility’s current capacity given its workforce today.
Outlander Sports destined for export will be going to Russia, Latin America, and the Middle East.
Currently, this factory also produces North America-only models such as the Galant, Endeavor, and Eclipse. All three of those vehicles are toward the end of their life cycles (in fact, they are probably past the end of their life cycles had they been sold by a company other than Mitsubishi), so we’re still waiting to see what Mitsubishi has in store for the remainder of its US lineup in coming years and for future Normal, Ill. production.
(As an additional comment, I had no clue whatsoever that the Endeavor is still being built and sold. I thought it rolled off into the sunset three or four years ago. Should I be embarrassed or should Mitsubishi?)
In 2010, workers at the plant, represented by UAW Local 2488, ratified a contract that gave back $1.67 per hour in wages under the threat of plant closure. They had received the $1.67 per hour increase earlier in 2010 when Mitsubishi failed to commit to a product for the plant within two years of the signing of a contract in 2008. That contract also included wage cuts. With the workers forced to make sacrifices to keep the plant open for the past few years, they are probably relieved this week to see some new product announcements coming their way.
This still doesn’t say much for Mitsubishi’s viability as a going concern in the US from a salesstandpoint. It’s one thing to makecars, but selling them is a whole other skill, and one that Mitsubishi hasn’t been great at for the past few years. Of course, it’s easier to sell a car when it’s a good one, competitive with the best of the competition. That can’t really be said about the Galant, Endeavor, or Eclipse, among others. The company still needs to come up with vehicles that US buyers want. We liked the Outlander Sport when we sampled it, but Mitsubishi as a brand will not survive in the US on the back of that model and the i (former i-MiEV) electric car (which, by the way, has a price advantage over the Leaf, but has not gotten very strong reviews).