Japanese automaker Mitsubishi will not be introducing new products in Europe as it will shift focus towards the more lucrative South-East Asian market, the company has announced. With the move, the manufacturer has cancelled models like the next-generation Outlander, L200 pick-up and the Mirage hatchback for Europe. In a release, Mitsubishi said that it plans to reduce fixed costs by 20 per cent over the next two years while shifting its business structure that will be centred on Asia, as part of a turnaround strategy due to the mounting losses. The company is also working on downsizing its low-profit businesses to improve operating profits. The decision is part of the brand's global operations to cut costs under the new 'Small but Beautiful' strategy.
At present, Mitsubishi has a 6.4 per cent market share in South East Asia, as compared to just one per cent in Europe and 0.9 per cent in North America. The firm plans to increase its market share to 11 per cent in the ASEAN region in the coming years.
While Mitsubishi has been clear about not introducing new models in Europe, the company has not officially announced its exit from the market just yet. At the same time, the company won't have new models to replace in the line-up when the cars do not meet the future European emission regulations. This will eventually lead to the brand pulling out of the market, albeit in a phased manner. The automaker's last new product for Europe was the Eclipse crossover introduced in 2017.
Speaking on the new strategy, Takao Kato, representative executive officer and CEO, Mitsubishi Motor Corporation, said, "We will shift our strategy from all-round expansion to selection and concentration. First of all, we will complete our structural reforms and further strengthen our competitive areas—ultimately to build a corporate structure that can surely generate profits during this mid-term period."
As part of its second phase of development, Mitsubishi will concentrate to build business in Africa, Oceania and South American markets. The company further said that it plans to strengthen its portfolio by FY2022 with PHEV and EVs, while also introducing a range of SUVs, pick-up trucks, and MPVs in the ASEAN region.
According to a report by Automotive News Europe, this also marks the end of the Mitsubishi Pajero SUV that will end production in 2021. The Sakahogi plant that manufactures the full-size offering will shut operations in 2023 as the brand looks at building a smaller-sized portfolio. The Pajero has been one of the longest-running models in recent times with the current-generation introduced globally in 2006. However, the low fuel economy ratings and newer products in the same segment have adversely affected the popularity of the legendary SUV.
Mitsubishi entered Europe in 1975 and has been selling a range of offerings over the years. The manufacturer was known for its reliable SUVs including the Pajero, Montero, Outlander, as well as iconic sports cars like the Lancer, Eclipse, Galant, Diamante, and the 3000 GT. The company also produced cars in Europe at the Nedcar facility in the Netherlands between 1995 and 2012.
Meanwhile, the brand has been nearly non-existent in India. While it retails the Pajero Sport and the Outlander SUV in the country, a limited dealer network and low sales that the products have limited reach. The models did not receive the BS6 compliance either in April this year, along with the industry. Last we heard from Mitsubishi India was when the brand reached out to the Indian government in December last year requesting to extend the BS6 deadline.