Mitsubishi Motors - Company History

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Financial history 1979–2026 — revenue, cost structure, balance sheet, cash flow and key ratios, year by year →

Founded 1970
Origin 三菱重工業
Founding location 東京都港区
Core business at founding Motor vehicle manufacturing taken over from Mitsubishi Heavy Industries
Listed 1988
President Kato Takao President since 2019 (age 64, as of 2026)
Current priority Overseas expansion · New product development A focus on South-East Asia and thirteen new models in six years
Founding
In April 1970 Mitsubishi Motors was established with funding entirely from Mitsubishi Heavy Industries, and in June it took over the parent's automotive division and began trading from Minato-ku, Tokyo. In passenger cars it stood below Toyota and Nissan, and it had neither the sales network nor the capital to open up North America on its own. The following year, 1971, Chrysler of the United States acquired 15 per cent of the shares and the company set out afresh as a carmaker funded by both Japanese and American capital. The United States distribution agreement signed at the same time, however, limited North American sales to two-door models, made Chrysler the exclusive distributor and barred Mitsubishi from building a sales network of its own. The shares were not brought to market until December 1988, eighteen years after the company was founded.
The Decision
The largest shareholder has changed hands three times, and each time the company has settled afresh on where it sells. It began with Chrysler's 15 per cent in 1971; then, after the management was replaced in the wake of the sokaiya payoff affair of 1997, in October 2000 the company handed 34 per cent of its shares to DaimlerChrysler and put the running of the passenger-car business in German hands. Daimler cut off support in 2004, and Mitsubishi switched to rebuilding on its own through an issue of preferred shares taken up by three Mitsubishi group companies and a fund. In 2015 it closed its Illinois plant in the United States, where capacity utilisation had fallen to around 50 per cent, and the following year, 2016, falsified fuel-economy data came to light and the company took in a 34 per cent stake from Nissan and was folded into the Renault-Nissan alliance. Each of the two episodes of misconduct settled in turn who would take up its capital, and set the order in which it withdrew from North America and from Europe.
Today
Mitsubishi Motors today sells cars in South-East Asia and Oceania. Of revenue of $18.3B (¥2.9tn) in the year to March 2026, the automotive business accounted for $18.0B (¥2.85tn), 99 per cent of the total, while the financial business came to no more than $265.6M (¥42bn). The Outlander PHEV, the Triton and the Xpander are built at six sites worldwide, and Thailand, Indonesia, the Philippines, Vietnam and Oceania form the main axis of overseas sales. In August 2021 the plant of Pajero Manufacturing closed; vehicle production in Russia ended in December 2023 and in China in February 2024. Operating profit, however, has fallen in two years from $1.3B (¥191bn) in the year to March 2024 to $477.4M (¥76bn), and net profit has shrunk to $63.2M (¥10bn). Narrowing down the places it produces in has built a structure that passes swings in demand in the regions it kept straight through to the bottom line.
Competition
What fixes where Mitsubishi Motors stands is not its rank at home but its position in South-East Asia. Its overseas production and sales companies — Australia in 1980, the United States in 1981, China in 2012, Indonesia in 2015 — were without exception set up jointly with Mitsubishi Corporation, so that the trading house's channels are the company's own channels. In December 2024 it entered talks on a three-way merger with Nissan and Honda, but the parties could not agree on the merger ratio; the talks were broken off in February 2025 and the memorandum cancelled. The medium-term plan of May 2026 puts about $6.3B (¥1tn) into growth investment over four years, with the Philippines, Vietnam and Japan as priority countries. Never having found a partner of comparable scale has left the company concentrating its products on the regions where the channels it built with the trading house still hold.

Timeline

1960–1997Split from Mitsubishi Heavy Industries, and the constraints of the Chrysler tie-up

  1. 1970Mitsubishi Motors established, wholly funded by Mitsubishi Heavy Industries
  2. 1970Four works taken over from the parent; trading begins
  3. 1971Chrysler acquires 15%; the US distribution agreement is signed
  4. 1977New Okazaki plant built at the Nagoya Motor Vehicle Works
  5. 1978Four-wheel vehicle production begins at Toyo Koki (later Pajero Manufacturing)
  6. 1980Mitsubishi Motors Australia set up with Mitsubishi Corporation
  7. 1981Mitsubishi Motor Sales of America set up for the US market
  8. 1982The Pajero SUV is launched
  9. 1985The basic joint-venture agreement with Chrysler is dissolved
  10. 1985Diamond-Star Motors founded with Chrysler for US production
  11. 1988Shares listed on the first section of the Tokyo Stock Exchange
  12. 1991All remaining shares in Diamond-Star Motors acquired
  13. 1994Sexual-harassment class action brought against the US subsidiary
  14. 1997Sokaiya payoff scandal breaks; Kawazoe Katsuhiko becomes president

1998–2015The Daimler tie-up, and a crisis brought on by two recall cover-ups

  1. 1998Pays $36.7M (¥5bn) to settle the US harassment suit
  2. 1999Basic agreement with Volvo on a capital tie-up and co-operation
  3. 2000DaimlerChrysler takes 34% and stands as parent company
  4. 2001The first recall cover-up comes to light
  5. 2002Rolf Eckrodt becomes president
  6. 2003Truck and bus business split off as Mitsubishi Fuso; stake sold to Daimler
  7. 2004Second recall cover-up; the consolidated equity ratio falls to 1.4%
  8. 2005DaimlerChrysler sells its whole holding; the alliance ends
  9. 2008Vehicle production in Australia ends
  10. 2010PCMA Rus established in Russia with Peugeot Citroën
  11. 2012GAC Mitsubishi Motors established in China
  12. 2015Mitsubishi Motors Krama Yudha Indonesia established
  13. 2015Vehicle production in North America ends

2016–2026Joining the Nissan alliance, and three-way merger talks with Nissan and Honda

  1. 2016Falsified kei-car fuel-economy data comes to light; Aikawa resigns
  2. 2016Strategic alliance signed with Nissan; Nissan takes 34% in October
  3. 2019Converts to a company with a nominating committee
  4. 2020The Small but Beautiful plan: Europe cut back, South-East Asia the focus
  5. 2021Net loss of $2.8B (¥312bn) after $2.7B (¥298bn) of extraordinary losses
  6. 2021Pajero Manufacturing ends production; the Gifu plant closes
  7. 2022Moves to the Prime Market in the TSE restructuring
  8. 2023Vehicle production at PCMA Rus in Russia ends
  9. 2024Vehicle production at GAC Mitsubishi Motors in China ends
  10. 2024Nissan sells part of its Mitsubishi Motors holding back to the company
  11. 2024Merger talks by Nissan, Honda and Mitsubishi Motors announced

Founding Story

1960–1997Split from Mitsubishi Heavy Industries, and the constraints of the Chrysler tie-up

Mitsubishi Motors was incorporated in April 1970 out of the automotive division of Mitsubishi Heavy Industries, and within a year had sold 15 per cent of itself to Chrysler in exchange for capital and a route into the United States. The price of that route was written into the distribution agreement signed alongside it, and the company spent the following two decades raising plants, opening sales companies in Australia and America and building the Pajero into a global name — all around a North American market it was not free to enter on its own terms.

The founding of Mitsubishi Motors and an unequal United States distribution agreement

By the 1960s the automotive division of Mitsubishi Heavy Industries was losing ground to Toyota and Nissan in passenger-car sales, and it was accepted inside the company that expanding the business would require an independent management structure. Chrysler Corporation of the United States, for its part, was looking for a foothold in Japan, and in 1969 the two sides reached an agreement to set up a joint venture. In April 1970 Mitsubishi Motors Corporation was established, wholly funded by Mitsubishi Heavy Industries[1], and in June of that year it began trading, having taken over four works from its parent — among them part of the Kyoto Works (today's Kyoto plant), the Nagoya Motor Vehicle Works (today's Okazaki plant) and the Mizushima Motor Vehicle Works (today's Mizushima plant)[2]. In 1971 the capital tie-up under which Chrysler acquired 15 per cent of Mitsubishi Motors' shares was formally concluded[3], and the company set out afresh as a carmaker funded by both Japanese and American capital.

The terms of the "United States distribution agreement" signed at the same time as that capital tie-up were, however, structurally unfavourable to Mitsubishi Motors. Under it the North American market was restricted to two-door models and to exclusive sale by Chrysler; exports to the United States of the four-door small cars that were the company's mainstay were in effect blocked, and Mitsubishi was not permitted to build a sales network of its own — the agreement worked as an "unequal treaty". Kubo Tomio (久保富夫), president at the time, later reflected that a tie-up that ties you down like this is one you should do without, and among senior management the revision of the contract was recognised as a task from early on. For the roughly ten years until the agreement was revised in 1981[4] the North American business was structurally constrained, and a structure in which management is swayed by the balance of power with a partner was seeded at the moment of founding.

The Pajero, and opening overseas markets on its own

In August 1977 the company built a new Okazaki plant at the Nagoya Motor Vehicle Works[5], and in December 1979 a new Shiga plant at the Kyoto Works[6], putting volume production of passenger cars and engines in place step by step. In October 1980, jointly funded with Mitsubishi Corporation, it established Mitsubishi Motors Australia Limited[7], and in December 1981, again jointly with Mitsubishi Corporation, Mitsubishi Motor Sales of America, Inc.[8], setting to work on a sales network of its own for the American market. The Pajero, an SUV launched in 1982[9], raised the company's profile in overseas markets on the strength of a brilliant record in the Paris-Dakar Rally, and held its place for many years as Mitsubishi Motors' most emblematic product and the face of the brand.

In October 1985 the company established Diamond-Star Motors Corporation in the United States, a joint venture with Chrysler[10], and moved into local production in North America. In 1985 Chrysler raised its shareholding in Mitsubishi Motors to 20 per cent[11], and the relationship between the two deepened further. In December 1988 the shares were listed on the first sections of the Tokyo, Osaka and Nagoya stock exchanges[12], giving the company the standing of a major Japanese carmaker in name as well as in fact. In July 1995 Diamond-Star Motors was renamed Mitsubishi Motor Manufacturing of America[13], and in August 1997 the company acquired a majority of the shares of MMC Sittipol of Thailand[14], settling on a policy of building an overseas production base with South-East Asia at its axis.

1998–2015The Daimler tie-up, and a crisis brought on by two recall cover-ups

Between 1998 and 2015 Mitsubishi Motors changed patron and then lost one. DaimlerChrysler took 34 per cent in 2000, recall cover-ups broke in 2001 and again in 2004, and by November 2005 the German group had sold out of the company altogether. What survived on Mitsubishi group capital was a smaller carmaker that spent the following decade leaving the developed markets — Australia in 2008, North America in 2015 — and moving its centre of gravity to South-East Asia.

Two recall cover-ups, and the end of the Daimler tie-up

In 1994 a sexual-harassment class action was brought at the company's American subsidiary, and in 1998 it paid $36.7M (¥5bn) in settlement. In March 2000 it signed a memorandum of understanding with DaimlerChrysler AG of Germany on a business tie-up spanning the passenger-car business as a whole, and in October of that year DaimlerChrysler acquired 34 per cent of Mitsubishi Motors' shares, taking a position equivalent to that of a parent company. In 2001, however, a recall cover-up came to light and an executive vice-president was referred to prosecutors; Mitsubishi Motors solicited early retirements and cut headcount, and in January 2003 it split the truck and bus business off by corporate demerger to form Mitsubishi Fuso Truck and Bus. In March of the same year it transferred 43 per cent of Mitsubishi Fuso's shares to DaimlerChrysler and 15 per cent to ten Mitsubishi group companies, and in March 2005 it transferred the whole of its remaining holding to DaimlerChrysler, withdrawing from the business.

In March 2004, though, a second recall cover-up came to light, the consolidated equity ratio fell to 1.4 per cent, and the company was driven into a critical state, effectively on the edge of insolvency. DaimlerChrysler signalled that it would refuse any further support for Mitsubishi Motors, and in November 2005 it sold its entire holding, dissolving the alliance. Mitsubishi Motors survived only through injections of capital from the Mitsubishi group companies, but having been abandoned by Daimler after Chrysler before it, the structural limits of a management model dependent on tie-ups with foreign capital were laid bare. Vehicle production at Mitsubishi Motors Australia ended in March 2008, and the retreat towards the core domestic business went on.

Shrinking in the developed markets, concentrating on South-East Asia

For Mitsubishi Motors after the truck and bus business was split off in 2003, the fragility of its base in the developed markets settled in as a structural problem. In 2008 it ended local production in Australia, and in April 2010 it established PCMA Rus in Russia, a joint venture with Peugeot Citroën Automobiles of France, as a move into the emerging markets. In September 2012, jointly funded with Mitsubishi Corporation, it established GAC Mitsubishi Motors Co., Ltd. in China, and in March 2015, again jointly with Mitsubishi Corporation, Mitsubishi Motors Krama Yudha Indonesia; a concentration of managerial resources on the emerging markets, chiefly in Asia, settled in as policy, and vehicle production at Mitsubishi Motors North America ended in November 2015 as part of the same movement.

The trend of shrinking in the developed markets became decisive with the exit from finished-vehicle production in North America, and the centre of gravity of the overseas business shifted to the emerging economies. The policy of concentrating managerial resources on markets centred on South-East Asia — Thailand, Indonesia and the Philippines — was carried over after the company joined the Nissan alliance in 2016. In the rebuild that followed the recall cover-ups the support of the Mitsubishi group was indispensable, yet it was difficult to draw a growth strategy of its own as a carmaker, and the company was driven once again into a position where it needed an outside partner. The worldwide roll-out of its principal models — the Pajero, the Lancer and the Galant — was maintained, but the weakness of its sales networks in the developed markets went unremedied as it plunged into the next phase of alliance.

2016–2026Joining the Nissan alliance, and three-way merger talks with Nissan and Honda

In April 2016 falsified fuel-economy data ended the company's independence for a third time: within weeks Nissan had agreed to take 34 per cent, and Mitsubishi Motors entered the Renault-Nissan alliance. The decade that followed brought a heavy net loss in the year to March 2021, the end of the Pajero, the closing of one overseas plant after another, and by December 2024 talks on merging with Nissan and Honda.

The strategic tie-up with Nissan Motor and the Renault-Nissan alliance

In April 2016 falsified fuel-economy data on kei cars — the light vehicles peculiar to Japan — developed jointly with Nissan came to light, and president Aikawa Tetsuro (相川哲郎) announced that he would resign to take responsibility at the shareholders' meeting in June. Chairman and CEO Masuko Osamu (益子修) asked Nissan's chairman Carlos Ghosn for support the day after the press conference, and in May 2016 Mitsubishi Motors formally signed a strategic alliance agreement with Nissan Motor covering a capital and business tie-up; in October of that year Nissan acquired 34 per cent of Mitsubishi Motors' shares by taking up a third-party allotment, and the company joined the Renault-Nissan alliance. Capital injection and managerial support from Nissan were to steady the business base, and the policy set out was to pursue concrete synergies such as the joint development and production of pick-up trucks and kei cars in South-East Asia. In June 2019 the company converted to a company with a nominating committee, strengthening its governance in parallel. Within the three-way alliance with Nissan and Renault, Mitsubishi Motors was expected to contribute in technical fields of its own such as plug-in hybrid and four-wheel-drive technology.

In the year to March 2021, however, weak sales led the company to book extraordinary losses of $2.7B (¥298bn), including $1.1B (¥118bn) of impairment on six domestic sites and $639.5M (¥70bn) of business-restructuring costs, and it fell as a result to a net loss of $2.8B (¥312bn) — a grave turn. In August of that year the production business of Pajero Manufacturing Co., Ltd. ended and the plant in Gifu closed, a symbolic turning point at which production of the Pajero, once the company's mainstay model, was brought to a halt. In the Tokyo Stock Exchange's market restructuring of April 2022 the company achieved the move to the Prime Market, but in December 2023 vehicle production at PCMA Rus in Russia ended, and in February 2024 vehicle production at GAC Mitsubishi Motors in China ended as well: the contraction of the overseas production network continued as the keynote of the company's business structure.

Three-way merger talks with Nissan and Honda, and the problem of leaning on South-East Asia

In December 2024 it was made public that Nissan Motor, Honda Motor and Mitsubishi Motors had begun talks on a merger of the three companies. Results for the year to March 2024 secured a profit, with revenue of $18.4B (¥2.79tn) and net profit of $1.0B (¥155bn), but the advancing withdrawal from the developed markets had left an earnings structure leaning on South-East Asia, and the view had spread in the market that taking part in a wider framework was unavoidable if the group's overall sales volume was to be maintained and the funds for investment in electrification secured. CEO Kato Takao (加藤隆雄) took the view that, given the strength of demand for plug-in hybrids, shifting to electric vehicles in one leap carried a high risk, and on the path of electrification too he kept his distance from the larger makers and declared a focus on PHVs. In November 2024 Nissan Motor sold back to Mitsubishi Motors part of the shares it had acquired in the third-party allotment of October 2016, and a reordering of the Nissan-Mitsubishi alliance was under way. The three-way talks surfaced as an issue that would repaint the competitive structure of the Japanese motor industry.

The history of Mitsubishi Motors is characterised as a process of entrusting its survival, one after another, to tie-ups with outside partners — Chrysler, DaimlerChrysler and Nissan. Taking the 1971 capital tie-up with Chrysler as its starting point, then the tie-up with DaimlerChrysler in 2000 and with Nissan Motor in 2016, the record of changing principal partner roughly every fifteen years shows how hard it is for a carmaker to keep the business going alone, and at the same time reproduced a structure in which management is easily swayed by the balance of power with a partner. The two recall cover-ups exposed structural problems in the quality-control system and produced the result of repeatedly losing the trust of partners, and the structure of dependence on partners has continued unbroken up to the opening of the three-way talks in December 2024.

Read the full history in Japanese →

Notes

  1. Mitsubishi Motors Corporation, annual securities report for the 56th term (year to March 2025), corporate-history section↩
  2. Mitsubishi Motors Corporation, annual securities report for the 56th term (year to March 2025), corporate-history section↩
  3. Mitsubishi Motors Corporation, annual securities report for the 56th term (year to March 2025), corporate-history section↩
  4. Mitsubishi Motors Corporation, annual securities report for the 56th term (year to March 2025), corporate-history section↩
  5. Mitsubishi Motors Corporation, annual securities report for the 56th term (year to March 2025), corporate-history section↩
  6. Mitsubishi Motors Corporation, annual securities report for the 56th term (year to March 2025), corporate-history section↩
  7. Mitsubishi Motors Corporation, annual securities report for the 56th term (year to March 2025), corporate-history section↩
  8. Mitsubishi Motors Corporation, annual securities report for the 56th term (year to March 2025), corporate-history section↩
  9. Mitsubishi Motors Corporation, annual securities report↩
  10. Mitsubishi Motors Corporation, annual securities report for the 56th term (year to March 2025), corporate-history section↩
  11. Mitsubishi Motors Corporation, annual securities report↩
  12. Mitsubishi Motors Corporation, annual securities report for the 56th term (year to March 2025), corporate-history section↩
  13. Mitsubishi Motors Corporation, annual securities report for the 56th term (year to March 2025), corporate-history section↩
  14. Mitsubishi Motors Corporation, annual securities report for the 56th term (year to March 2025), corporate-history section↩

References & sources

  1. Mitsubishi Motors Corporation (annual securities reports), including the corporate-history section and the consolidated filings for the years to March 2002, 2003, 2004, 2005, 2007, 2015, 2021, 2022 and 2025; company news release of 20 Oct 2016 on the alliance with Nissan Motor.
  2. Nikkei Business (Nikkei BP): 31 Jul 1978 (editor's interview with Kubo Tomio); 3 Nov 1997 on the payoff affair; 9 Feb 1998 (Kawazoe Katsuhiko on becoming president); 20 Apr and 27 Apr 1998; 3 Apr and 2 Oct 2000 on the Daimler tie-up; 26 Jul 2004; 21 Aug 2017 (Masuko, CEO, Nikkei Business Digital); 13 Feb 2023.

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