(music: "Flex" - Jeremy Blake
from the YouTube audio library) Mitsubishi should be the dominant Japanese
car producer. It was backed by a large parent company,
it didn’t come to producing vehicles late in the game, and it produced good, dependable cars. Yet Mitsubishi Motors is essentially owned
by one of those competitors it should have beaten – Nissan, and is being reduced to
little more than a brand name selling cars that under the skin are essentially Nissans. So, even though it was born with a silver
spoon in its mouth, why didn’t Mitsubishi dominate, despite producing
some quite amazing cars? This is the Mitsubishi Story. (music) The Mitsubishi company can trace its roots
back to 1870 as the shipping firm Tsukumo Shokai. Henry Ford was just 7 years old at that time and hadn’t yet started thinking
about producing motor cars. To be honest, nobody had as they hadn’t
been invented yet! The name “Mitsubishi” was used three years
later, with “Mitsu” meaning three, and “bishi” meaning the rhombus shape of water
caltrop leaf. The Mitsubishi logo would eventually call
out this name with three rhombus shapes. They quickly diversified into businesses related
to shipping, eventually making their own ships. The company was becoming an ever-bigger presence
in a newly industrialised Japan, so it was natural they started looking at car production,
with the 1917 Model A. It was an expensive hand-built luxury car, and couldn’t
compete against foreign imports, so production ended five years later. Mitsubishi tried again in 1934 with the four-wheel
drive PX33, commissioned by an increasingly militaristic Japanese Government
for the war effort against China. Four prototypes were made, but the
car never made it into production. Mitsubishi did produce buses though, and after
the Second World War production continued, along with a small three-wheeled cargo vehicle
– the Mizushima, and a nattily-titled scooter – the “Silver Pigeon”. Their old aircraft factory, now dormant, started
producing car bodies for the companies that would be known eventually as Nissan and Toyota. But the Allies who occupied Japan took a dim
view to Japanese industry in general, and the “zaibatsu”, or large family-run businesses
that had supplied much of the war effort. Like in Germany, some of the Allies felt a
return to a farming economy would prevent another military build-up. Mitsubishi was one of
these large industrial “zaibatsu”, and so was split up in 1950 into three companies. One company did a deal with the American Kaiser
company, and another with Willy’s to assemble Jeeps in Japan, but the companies split was
short lived. The Allies idea of reducing Japanese industry
quickly reversed when they saw the rise of communism in the Far East, and the threat
of an agrarian Japan falling to communism. Japan’s industry ramped up to bolster the
economy, and show the Japanese how great capitalism was, and Mitsubishi would become one company
again in 1964. Their first mass-produced car was the 500cc
3-speed Mitsubishi 500, introduced in 1960. Like their rivals, they’d focus on small,
economical cars that an up-and-coming Japanese middle class could afford. Foreshadowing their future motorsports dominance,
Mitsubishi entered the 500 into the Macau Grand Prix in 1962, with it taking the top
4 spots for the under 750cc category. Mitsubishi were showing their cars weren’t
just a good deal, they were tough too! Mitsubishi’s cars battled Honda, Nissan
and Toyota on home territory, and soon they were looking to the export market. But while the other three companies would
borrow money to push into international markets under their own name, Mitsubishi would work
with automotive partners to limit their financial risk. The first partnership would be with America’s
number 3 car producer, Chrysler. Mitsubishi split off its automotive division
into a separate company, Mitsubishi Motors, and 15% would be sold to Chrysler to form
a long-lasting alliance. Mitsubishi had recently launched the Colt
Galant, and it was sold as the entry level Dodge Colt, Chrysler’s answer to local competition
such as the Ford Pinto and Chevy Vega, themselves a reaction to the German VW Beetle and Japanese
imports. It would be sold under various other names
by Chrysler around the world. Chrysler’s worldwide market reach turbocharged
Mitsubishi’s exports. It worked well for Chrysler as well. This was just the car they wanted - an inexpensive,
basic car that plugged a hole in its line-up, but Mitsubishi had grander goals, as could
be seen for the Colt Galant GTO that never made it to North America. This was a 123hp (92 kW) muscle-car wannabe. It made it to New Zealand, the UK and a few
Asian countries, but its high price stopped it selling in any great numbers outside of
Japan. Mitsubishi had been successful in motorsports
in the 60s, and they continued into the 1970s with the Lancer 1600 GSR. The rally car did so well in rallies in Africa
it became known as the “King of Cars”. Such was its durability it took all the podium
positions in the gruelling 1976 Safari Rally. The road going version produced a respectable
109hp (81 kw) and would also be sold both in Japan and Europe. The Galant would get its own hot version as
the Galant FTO. Hyundai were looking to build their own cars,
as the Fords they were building weren’t standing up to Korean roads. Mitsubishi’s durability looked promising,
so a deal was done and their first car, the Hyundai Pony borrowed heavily from the new
Mitsubishi Lancer. Mitsubishi would go on to take a 10% stake
in 1982, and Hyundai would go onto some success building and selling Mitsubishi cars. Mitsubishi might have been making joint agreements
left, right and centre to hedge their bets in new export markets,
as well as hopefully accelerate sales, but they would enter some markets on their own. For example, in 1974 they created the Colt
Car Company in the UK, and across Europe Mitsubushis would be sold as “Colts”, maybe as the
Mitsubishi name was a little too “foreign” and hard to pronounce for Westerners in the
1970s. With the oil shock of 1973, Mitsubishi were
in a perfect position to capitalise on the need for small, fuel-efficient cars. Chrysler benefitted from its existing Japanese
partnership, and their small European Chrysler cars like the Hillman Avenger were passed
over for Mitsubishis that customers preferred. By 1980 Mitsubishi were making 1M cars every year. But there was tension in the partnership. Chrysler felt Mitsubishi shouldn’t be selling
against Chrysler in foreign markets. Mitsubishi felt Chrysler were meddling in
their corporate affairs. But with Chrysler having a stake in their
company, there wasn’t much they could do. To make matters worse, Chrysler was staring
bankruptcy in the face. They started selling off parts of their business,
including the European operation to PSA, and their Australian business to Mitsubishi. Chrysler’s woes gave Mitsubishi some newfound
autonomy. Mitsubishi would start by entering the US
market under their own name, showing that they were more than just inexpensive economy cars. But they were late to the party – Honda,
Nissan and Toyota had been selling cars in North America for over a decade and by now
had an established dealer network coast to coast. In comparison, Mitsubishi entered the US market
with just 70 dealers in 22 of the 50 states. More worryingly, in markets like Europe where
Mitsubishi distributed and marketed their own cars, and had started earlier, they were
still getting outsold by their Japanese rivals. But Mitsubishi’s advantage was they had
a raft of new cars, including the Supra, Z car competitor, the Starion, so named as a
contraction of the phrase “Star of Arion”, and not as some have speculated a Japanese
mispronunciation of the word “stallion”. With an eye to motorsport competition, the
Starion was a beast, using the latest fuel injection and turbocharging to produce 168
hp (125 kW) and get to 60 in 7.2s. But it wasn’t all fast cars. Mitsubishi had been building the Willy’s
Jeep in Japan since the 50s, and would continue until 1998. They used experience with this off-roader
and their own considerable engineering knowledge to launch the Pajero, also known as the Shogun
or Montero depending upon where you live. It had been in development for quite a while
– the first prototype was shown 9 years before customers started driving it in 1982. This was once again an answer to local Japanese
competition. Mitsubishi had made a great car though, as
they proved when it dominated in the Dakar Rally in the 1980s using essentially spec
cars, and the Guinness Book of Records lists Mitsubishi as having the most Dakar Rally
wins of any car manufacturer. The very fact I didn’t know this speaks
volumes to Mitsubishi’s failure to market its cars effectively. Just as Mitsubishi was going to take market
share, they hit another roadblock. Western car companies felt under threat from
Japanese car production, and pressured their Governments to take action. The US effectively set up import quotas for
Japanese car companies, and Mitsubishi would establish the “Lonsdale” marque in the
UK to unsuccessfully get around import quotas. If you’re running up against import quotas,
there’s always joint agreements – something Mitsubishi was getting very good at. The Malaysian Government founded the Proton
car company and partnered with Mitsubishi to build the Lancer Fiore there. The first cars were delivered in 1985, and
were a big hit, at least in Malaysia. Proton started exporting around the world
and were soon producing more Mitsubishi models. Import quotas though were biting hardest in
the USA, especially as Mitsubishi were still working with Chrysler. Every Pajero or Starion sold by Chrysler was
one less car Mitsubishi could sell from their quota. Despite the two companies so-so relationship,
they agreed, who would have guessed it, to another joint agreement! Mitsubishi and Chrysler formed “Diamond-Star
Motors”, named for the Mitsubishi diamond and the Chrysler pentastar. The new company would manufacture cars using
Mitsubishi and Chrysler parts in a new US factory, getting around any import quotas. The first cars would be the 1989 Plymouth
Laser, Eagle Talon and Mitsubishi Eclipse, all essentially the same car. The Eclipse would go on to become one of Mitsubishi’s
classic sports cars from the 90s, offering a fun two-seater sports car. Mitsubishi Motors was still a privately held
company, getting investment from banks, but in 1988 Mitsubishi Motors went public. This provided a big influx of capital to help
Mitsubishi pay off debts and expand, but again this is something its Japanese rivals had
done years before. Mitsubishi was late to the party, so would
it be able to catch up? The Eclipse wasn’t Mitsubishi’s only sports
car. They continued their tradition of taking family
cars rallying with the Mitsubishi Galant VR-4 in 1987, winning the RAC Rally two years later,
and selling quite a few to customers in the process. They replaced the Starion with the fire-breathing
3000GT, called the GTO in Japan after the nostalgia for the 1970 Colt Galant GTO. The 3.0L V6 put out 282hp (210 kW), getting
to 60 in under 6 seconds. Mitsubishi still had an agreement to give
Chrysler first refusal of any new car they made, and Chrysler would have been fools to
turn down the 3000GT. But there was cooperation, with Chrysler doing
the styling. It would appear as the Dodge Stealth, but
this agreement with Chrysler would end in 1990, the year the 3000GT launched. Built on the same platform was the Diamante
- Mitsubishi’s foray into luxury motoring. It might have looked like a BMW clone, and
surprising BMW didn’t take Mitsubishi to court over it, but the Diamante was designed
to take on the threat from Honda’s luxurious Legend. By now Mitsubishi were making all kind of
vehicles – mass market cars like the Mirage, SUVs, sports cars, luxury cars, at a rate
of 1.5M per year. It was also producing trucks and buses. Mitsubishi was spreading itself thin
going after its big Japanese rivals, usually reacting to new models they were producing. And it still hadn’t built out its US dealer
network. In comparison, Subaru were focusing on doing
just one type of car well. Just as Mitsubishi were hoping to expand,
the Japanese economy hit the rocks, and borrowing money was suddenly harder. A lack of cash would plague the company for
almost two decades. Mitsubishi fell back on what they knew – joint
developments! With production already in China and southeast
Asia they did a joint development with Suzuki in Indonesia to make light trucks, and Volvo
to produce the Mitsubishi Charisma in the Netherlands. But one long troubled relationship was coming
to an end. Mitsubishi bought out Chrysler’s 50%
stake in Diamond-Star Motors in 1991, and Chrysler sold its stake in Mitsubishi in 1993. Mitsubishi in the 1990s would be all about
rallying. The Galant VR-4 gave way to the mighty Lancer
Evolution, commonly known as the “Evo”. Mitsubishi steadily improved the
design until 1996 when they won the driver’s World Rally Championship for the first time. They’d also win in 97, 98 and 1999, taking
the manufacturers championship in 1998. The road-going version of the Evo would wow
customers, and pitted Mitsubishi against Subaru for turbocharged all-wheel drive glory. The Evolution name would also be used for
the special off-roading Pajero competition car for the Dakar Rally. Continuing their line of 2-seater sports cars,
Mitsubishi launched the FTO in 1994, taking the name from the 1974 Galant FTO. Although it might seem this and the
Mitsubishi Eclipse were related, they were based on completely different platforms. Mitsubishi wasn’t rationalising its product
line to reduce its development budget. Many people celebrated the millennium in style,
and so did Mitsubishi, with three new joint ventures of course! One was with Hindustan Motors in India, a
further deal with Volvo to work on trucks, and a deal with PSA to jointly develop a new
diesel engine. After the millennium dawned they made a further
deal with DaimlerChrysler, bringing the old married couple of Chrysler and Mitsubishi
back together. Mitsubishi launched the Outlander crossover,
also known as the Montero Sport, and attempted to boost its US sales by offering a 0% down,
0% interest and no monthly payments for 12 months. “It’s back! 0-0-0. Yes, you heard me right! Don Herring Mitsubishi has 0 down, 0 interest
and 0 payments!” But in a rush to sell, dealers sold to people
with low credit scores, and when customers started defaulting on their agreements, Mitsubishi
had the expense of repossessing cars that were now worth less than it cost to manufacture. Mitsubishi was forced to take a £350M ($454M
USD, €420M EUR, $610 AUD) cost, and with the negative publicity and lack of money to
help sell cars, sales in the US shrank. In 2000 it emerged that management had covered
up car defects, but in 2004 it became clear this was a much bigger problem going back
27 years. And this wasn’t fit and finish problems
– the defects related to malfunctioning clutches, fuel leaks and failing brakes. When similar problems were found on their
line of buses and trucks, Mitsubishi ended up recalling close to 1M vehicles. The management team including the President
were prosecuted and were looking at going to gaol. They also found themselves unemployed. The revolving door for Mitsubishi Presidents
was severely holding the company back – between its founding and 2005 14 people held the office,
an average one every 2.5 years. Mitsubishi’s parent company, who owned a
significant stake in Mitsubishi Motors, was forced to step in to bail the company out. They put together a revitalisation plan to
turn the company around and by 2007 Mitsubishi Motors posted its first profitable quarter
in four years. Hoping to revitalise Australian sales, Mitsubishi
launched the 380 in 2005 to replace the aging Magna. Developed at great expense,
initial sales looked promising, but after 6 months they were starting to falter. By 2008 Mitsubishi announced the closure of
their Australian factory. Like many car companies, production in Australia
was just too costly, and by 2017 all Australian car production had ended. The fruits of the revitalisation plan though
came in 2009 with Mitsubishi’s next-generation vehicle. The MiEV was the first mass-produced highway-capable
electric vehicle. It had a 100 mile (160km) range, and with
built-in fast charging could charge to 80% in just 30 minutes. In the wake of the 2011 earthquake and tsunami,
Mitsubishi launched a “power box” that could turn your MiEV into a backup power source
for your home. Mitsubishi hoped to sell 30,000 cars a year,
and struck a deal with PSA to sell the car as the Peugeot iOn and Citroen C-Zero. Although Mitsubishi was first to market, it
was Nissan’s Leaf that became the car to buy. The Leaf was larger, it had a similar range,
and most importantly it had Nissan’s marketing and dealer network. Nissan were offering leasing agreements that,
given the cost of electricity versus gasoline, made the Leaf free or close to free depending
upon how many miles you drove it. Sales of the MiEV weren’t anything near
what Mitsubishi had hoped, and the global recession meant they had to suspend supplying
cars to Europe. But with slow European sales, PSA had 4,400
unsold cars already on its hands, and the interruption of supply was barely noticed. Annual sales never got over 11,000, and in the
first half of 2014 they only sold 1,700 worldwide. That same year more than 61,000 people bought
a Leaf. Nissan might have been a tough competitor
in the EV space, but Nissan and Mitsubishi forged, yes, you guessed it, a joint venture
to manufacture a kei car for the Japanese market. But in 2016 Nissan found discrepancies between
the fuel consumption figures Mitsubishi was reporting and reality. This led to findings that Mitsubishi had been
using the wrong test methods for calculating fuel consumption in Japan since 2002. Mitsubishi Motors wasn’t doing well. Western Europe production ended in 2012, and
US production at the former Diamond-Star factory ended in 2015. With Nissan pressuring Mitsubishi for compensation
over the fuel emissions scandal, both companies agreed in 2016 that Nissan would purchase
a 34% controlling stake in the company, effectively making Mitsubishi a subsidiary of its long-time
Japanese competitor. With Mitsubishi now part of the Renault-Nissan
alliance, they’ve announced new cars will only use Nissan platforms. They exited the UK market in 2021 and announced
they would end production of the mighty Pajero. Partnerships can be a great thing. Two companies can be more than the sum of
their parts. But they don’t always have the same interests,
and relying on another company to grow your business can be a big mistake. And when your partner runs into problems like
Chrysler did, long term deals can kill your own business. Mitsubishi wasn’t the master of its own
destiny. When they were a private company, they never
had enough money, and when they went public they were constrained by the
Japanese economic slowdown. By installing a revolving door to the President’s
office, they never had a long-term vision. Mitsubishi’s management were always trying
to get a fast win, and that meant joint agreements, and a muddled message. Were they a mass market car maker, or a niche
sports car or SUV company? Not even Mitsubishi seemed to know. They made some great cars, produced by talented
engineers, but many were reactions to what the competition were already doing. They rarely led the market, maybe due to a
timid management team worried about taking risks. All this combined to take a company that had
all the advantages when it was founded to being a subsidiary of Nissan. Mitsubishi is a story of what could have been,
but in the process, it put a lot of smiles on drivers faces! Well thanks for joining me on the roller coaster of Mitsubishi's history! Thanks for watching and I'll see you in the next video.
