Company history

By the 1960s the car division of Mitsubishi Heavy Industries trailed Toyota and Nissan in passenger-car sales, and the view had settled inside the group that real expansion needed an independent management structure. Chrysler, for its part, wanted a foothold in Japan. The two agreed to set up a venture in 1969, and in April 1970 Mitsubishi Motors was established as a wholly owned subsidiary of Mitsubishi Heavy Industries; that June it took over four plants — at Kyoto, Nagoya (now Okazaki) and Mizushima among them — and began trading. In 1971 Chrysler took a 15% stake, and the company set out anew as a carmaker of joint Japanese and American capital.

But the United States Distribution Agreement signed alongside that stake was structurally unfavourable. It confined Mitsubishi to two-door cars in North America, sold exclusively through Chrysler, effectively barring exports of its mainstay four-door small cars and forbidding it from building a dealer network of its own — an “unequal treaty,” as it worked in practice. President Tomio Kubo, an engineer by training, said early and often that such binding tie-ups should be avoided, having grasped that the dependence would seal off the growth of Mitsubishi’s own brand. For roughly a decade, until the contract was revised in 1981, the North American business stayed constrained — and a structure in which management is swayed by the balance of power with a partner was embedded at the company’s birth.

The way around the contract’s constraint was product strength. The Pajero SUV, launched in 1982, carried the brand across the world on the back of a celebrated record in the Paris–Dakar Rally, and for years stood as the most emblematic product Mitsubishi made. Behind it the company built distribution of its own — a sales arm in Australia in 1980 and in the United States in 1981, both with Mitsubishi Corporation — while new plants at Okazaki (1977) and Shiga (1979) brought passenger cars and engines up to volume production.

In 1985 Mitsubishi set up Diamond-Star Motors, a manufacturing joint venture with Chrysler in the United States, and Chrysler raised its stake to 20%. In December 1988 the company listed on the First Sections of the Tokyo, Osaka and Nagoya exchanges, taking its place as a major Japanese carmaker in name and fact. It renamed Diamond-Star as Mitsubishi Motor Manufacturing of America in 1995, and in 1997 took majority control of Thailand’s MMC Sittipol — settling on a Southeast Asia–centred base for overseas production.

Yet the year it turned to Asia was also the year its governance first cracked. In 1997 a scandal broke over payments to sokaiya (corporate racketeers), and Katsuhiko Kawazoe took the presidency to break the shadow rule of Chairman Nakamura, who had held sway over personnel. It was the first surfacing of a habit — of neither passing bad news upward nor heeding demands from outside — that would run through everything to come.

In 1998 Mitsubishi paid a $36.7M (¥5bn) settlement in a U.S. sexual-harassment class action. In March 2000 it struck a basic agreement with Germany’s DaimlerChrysler across the passenger-car business, and that October DaimlerChrysler took a 34% stake — a parent-level holding. But in 2001 a recall cover-up was exposed, a vice-president was referred to prosecutors, and the company cut staff through early retirement. In 2003 it spun off its truck and bus operations as Mitsubishi Fuso Truck & Bus, selling that business to DaimlerChrysler in stages and exiting it entirely by 2005.

Then, in March 2004, a second recall cover-up surfaced. The consolidated equity ratio collapsed to 1.4%, near the brink of insolvency; DaimlerChrysler refused further support and in November 2005 sold its entire Mitsubishi stake, dissolving the alliance. Only capital injections from Mitsubishi group companies kept the carmaker alive. After Chrysler, now Daimler too had walked away — laying bare the structural limit of a management model that leaned on foreign alliances.

What followed was retreat from the advanced markets and concentration on emerging Asia. Mitsubishi ended local production in Australia in 2008 and in North America in 2015, while opening ventures in Russia (2010), China (2012) and Indonesia (2015). Its main models kept their global presence, but the weakness of its dealer networks in the rich markets went unfixed — and was carried, unresolved, into the next alliance.

In April 2016 a fuel-economy data fraud came to light. Rather than attempt a standalone rebuild, chairman and CEO Osamu Masuko phoned Nissan and within weeks entrusted it a 34% stake, bringing Mitsubishi into the Renault–Nissan alliance in October 2016. Nissan’s capital and support stabilised the base, with synergies mapped out in Southeast Asian pickups and kei cars; in 2019 the company moved to a nominating-committee board. Mitsubishi was expected to contribute its plug-in hybrid and four-wheel-drive technology to the group.

The stability did not hold. The year ended March 2021 brought a $2.8B (¥312bn) net loss on weak sales, and in August 2021 the Pajero Manufacturing plant in Gifu closed, ending production of the very model that had once been the brand’s face. In 2022 the company shifted to the Tokyo exchange’s Prime market, but its overseas production kept contracting — Russia in 2023, China in 2024.

In December 2024 Nissan, Honda and Mitsubishi announced merger talks. But in February 2025 the Honda–Nissan integration collapsed over the merger ratio, and the three-way framework dissolved with it. Mitsubishi switched to a standalone medium-term plan, unveiled on 29 May 2026: about $6.3B (¥1tn) of growth investment over four years to fiscal 2029, thirteen new models in six years, a revival of the Pajero within fiscal 2026, and a focus on the Philippines, Vietnam and Japan — filling the gaps in electrification and autonomous driving through cooperation with Nissan and Honda. Chrysler, Daimler, Nissan: for more than half a century Mitsubishi Motors has entrusted its survival to a run of partners, and now must try to stand on its own products.