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View Full Version : Mitsubishi Motors May Sell U.S. Operations


knicks125
02-17-2005, 09:10 PM
<B>M'bishi Motors may sell U.S. ops</B><p><I>By Carolyn Pritchard, MarketWatch<br>Last Update: 10:36 PM ET Feb. 17, 2005</I><p><B>SAN FRANCISCO (MarketWatch) -- Mitsubishi Motors Corp. is quietly seeking a buyer for its U.S. operations, a move that may well signal the company's intent to exit the world's largest car market, according to a published report Friday.</B><p>Mitsubishi Motors' new president, Osamu Masuko, traveled to Detroit in January to begin talks with potential buyers during the North American International Auto Show, the Wall Street Journal reported, citing people familiar with the matter. See Wall Street Journal story.<p>He was accompanied by Yasushi Ando, head of Tokyo-based investment and workout fund Phoenix Capital Co., which holds a 21.2 percent stake in Mitsubishi Motors, sources told the Journal.<p>During their trip to Detroit, Masuko and Ando met privately with several industry executives, including representatives from U.S. private equity fund Ripplewood Holdings LLC and the Austrian unit of parts supplier Magna International Inc. that assembles vehicles under contract from different auto makers, the Journal reported, citing people familiar with the matter.<p>Mitsubishi is interested in discussing a sale of its Normal, Ill., plant as well as its North American sales unit that is based in Southern California, according to the Journal report. The key asset of the sales arm is the relationships Mitsubishi has with about 600 dealerships across the U.S., according to the Journal. Those could be valuable to other car makers that are expanding in the U.S. but need more dealers to continue growth, the Journal noted. Examples include Hyundai and Kia Motors, both of South Korea.<p>Mitsubishi representatives reportedly confirmed that Masuko and Ando attended the Detroit auto show, but wouldn't comment on any meetings, adding only that Mitsubishi has "no plans to withdraw from the North American market."<p>Mitsubishi Motors has been trying to recover from sharp falls in sales prompted from a slew of recall and defect scandals in Japan since last year.<p>The company's discussions with potential buyers of its U.S. operations are part of an effort to sharpen the focus of the company and end massive losses, the Journal reported.<p>At the end of January, Mitsubishi Motors said it would receive 540 billion yen ($5.2 billion) in new financial aid aimed at ensuring its return to profitability in the fiscal year ending March 2007. <p>The company also widened its loss outlook and lowered its sales forecast for the current fiscal year, saying it now sees a net loss of 472 billion yen on sales of 2.035 trillion yen, compared with a Dec. 24 forecast calling for a net loss of 240 billion yen on sales of 2.1 trillion yen. See full story.<p>Selling off its weak U.S. operations has been an option that many critics say the Japanese car maker should consider, according to the Journal. But it may have trouble attracting a buyer, the Journal noted; the U.S. sales arm ran up losses after giving loans to many young consumers who had poor credit histories and later defaulted on the payments.<p>Mitsubishi Motors is one part of the larger Mitsubishi family of companies which, though separate entities, hold shares in each other. People familiar with the group's thinking told the Journal that certain key members of the group, notably those at the Bank of Tokyo Mitsubishi, are growing impatient with the lack of progress in fixing the car maker. Executives at the bank, according to the report, are under pressure from regulators who are growing nervous about the bank's exposure to the troubled car maker. Bank of Tokyo Mitsubishi reportedly declined to comment.<p>Representatives of Ripplewood also reportedly declined to comment. People familiar with the matter told the Journal that Ripplewood didn't show much interest in Mitsubishi's operations.<p>Magna Steyr, an Austrian unit of Magna International that assembles vehicles for several car makers including DaimlerChrysler AG, BMW AG and Volkswagen AG, is potentially interested in building up a similar business of contract auto manufacturing in North America, according to the Journal.<p>Magna's president, Mark Hogan, reached by phone, reportedly said that he was told that a meeting had been arranged between Masuko and Ando and representatives from the part supplier's Austrian unit, but he didn't know whether it actually took place. Hogan added that the chances of Magna Steyr buying the Mitsubishi Motors plant were "a long shot at best," the Journal reported, saying Magna Steyr would face a huge challenge bringing its business model to North America because auto makers here suffer from overcapacity.<p>"We would have to get a book of business from three or four [auto makers] that would allow us to fully utilize their capacity before we even consider buying the plant," Hogan told the Journal.<p>Shares of Mitsubishi Motors were up .73 percent in midday trade in Tokyo Friday.<p>Sources: MarketWatch<p>This article resides here: <A HREF="http://cbs.marketwatch.com/news/story.asp?guid=%7B4E1572E3-1F25-439A-859F-5E7B40A1F849%7D&siteid=google&dist=google" TARGET="_blank">http://cbs.marketwatch.com/new...oogle</A>

CarMattZu777
02-17-2005, 10:10 PM
Hmmmmm, sounds bad, and I was starting to believe Mitsu would get themselves out of this problem.....

Ascariss
02-17-2005, 10:59 PM
Magna huh, I could see that. hmm

evomk8
02-18-2005, 07:43 AM
Mitsu corporate has already refuted the story...<p>I don't mean to get into a rant here... but seriously, the media is making every effort to kill this company off. Since 1997, every little negative thing about Mitsu has been publicized and re-hashed and re-publiziced. Does anyone ever mention how Subaru hid defects and was forced to recall over a million cars in 1997...??? No, it's been layed to rest. Apparently, Mitsu just sounds too Japanese, has to many historical connections (Zero fighter), and has become an easy target for one gross mistake (the harrassment suit).<br>In addition, DCX had no idea how to use Mitsu and simply tried to assign them into a segment without really considering Mitsu's core competencies and customer base (hence the ugly designs thanks to Boulay since 2000).<br>OK, I'm uping my Prozac for the day...

bolita
02-18-2005, 09:15 AM
What if a Chinese conglomerate takes over Mitsubishi? I am the only one that could envision such a turn of events? <IMG NAME="icon" SRC="http://www.germancarfans.com/images/forums/eek2.gif" BORDER="0"> <IMG NAME="icon" SRC="http://www.germancarfans.com/images/forums/bonk.gif" BORDER="0">

evomk8
02-18-2005, 11:13 AM
...or maybe Korean...

nismo
02-18-2005, 12:35 PM
I agree.. the media definately seems to want Mitsu to fall. I believe Mitsu is trying and hopefully they will make some good changes. They have pushed all their future products forward.. having 2 new cars this year and 3 major products next year. At the same time they're suppose to improve models like the Galant and Endeavor with major facelifts..

-Peter-
02-19-2005, 01:59 AM
Its not only because press is trying to kill Mitsu.<p>many people thinks that Mitsu cars are bad, and that those quality-issues are world-wide. I havent heard anything like those recalls of US in EU market. Old Mitsus are one of the most reliable cars that I have seen, just like old Toyotas. And when the Image of Mitsu is once gone bad, some people really thinks that It cant never be good anymore <IMG NAME="icon" SRC="http://images.zeroforum.com/smile/emsad.gif" BORDER="0"> <p>What they really need in EU-market is new Lancer and somekind of Galant (US or JDM) to get more models to the dealerships. The old Galant was quite popular in here.<br>

Cozz
02-19-2005, 06:56 AM
Hmm, Mitsu builds the Sebring and the Stratus for DCX with a little more than 2K units YTD. They have stoped the Eclipse model and only producing the convertible. The Galant and the Endeavor are also built here. In total, Mitsu only built 10,706 units YTD vs. 21,824 units YTD in 2004. This is another 50%+ drop in just two months!<p>I do think they will let do of some plants in NA but I don't think they are not leaving the US.

CarMattZu777
02-20-2005, 11:37 AM
I think they should just change their name and model names. A fresh start. Its just getting to bad for them, they relly dont have anything to lose.