PSA Autos: Mitsubishi Motors (7211) Reinvented - New-found Confidence Backed by Nissan-style Strategies
Mitsubishi Motors (7211) Reinvented - New-found Confidence Backed by Nissan-style Strategies
Mitsubishi Motors (MMC) released its 3-year mid-term plan on October 18th. As usual with these plans, it contained numerous numerical targets as well as the strategies to achieve them. Our general impression of the plan and the presentation was that MMC is back on stage with a new-found confidence, thanks to the support of alliance partner Nissan (7201).
The direct and immediate Nissan impact is most noticeable when looking at the details of these strategies, which are similar to Nissan’s strategies of the last ten years, adapted to MMC’s positioning. MMC’s new COO, Trevor Mann, used to be Nissan’s Chief Performance Officer, and the outlined path to success seems to bear his stamp. In addition, Nissan’s backing also becomes apparent when MMC talks about the disruption of the auto industry and how it can tackle the new trends. While autonomous drive, mobility services, connectivity and electrification would have been red alert topics before Nissan’s takeover, MMC now knows it has a chance to survive the upheavals of the industry as a member of the Nissan-Renault Alliance group.
We believe that this new lifeline has created some genuine enthusiasm within MMC, and that MMC employees are once again motivated and excited about their business. Nissan must be seen as a friendly force and MMC seems eager to adopt the suggested changes to corporate culture and business organisation. This is a big positive, in our view, since it suggests that the integration of MMC into the Alliance should run smoothly.
MMC’s FY19 Key Targets:
- Revenues of ¥2.5trn
- Unit sales of 1.3mil vehicles
- OPM of 6%
- Positive free cash flow
Growth Strategies will focus on:
- Product Renewal
- Key markets
- Cost optimisation
Mitsubishi Motors and its affiliates are mainly engaged in the manufacture and sale of motor vehicles including passenger cars as well as component parts. Co. is engaged in the development, design, manufacture, assembly, sale and purchase, import and other transactions relating to automobiles, component parts and replacement parts, agricultural machinery and industrial engines; the sale and purchase of used automobiles; the sale of measuring equipment; and acting as insurance agents in accordance with laws relating to property damage insurance and to automobile damage indemnity insurance. In addition, Co. is involved in the provision of automobile leasing and sales finance services.
Founded in 2009, Pelham Smithers Associates (PSA) provides market intelligence on Asian technology, focusing in particular on Japan. The industries covered by our team of specialists are: consumer electronics, telecomms, pharmaceuticals, internet, electronic parts and materials, automotive technology, retail and capital goods.
PSA produces both company and sector reports. The focus of PSA’s research is to identify winners and losers as new technologies impact the top and bottom lines of corporations. Critical to our research is the clear explanation of how these new technologies work and how they impact companies and industries.
The founding partners have worked closely together for twenty years and the team has more than doubled in size since 2012.
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