New Mid-term Business Plan

Step Up 2010

Mitsubishi Motors Corporation
Feb. 29, 2008

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Contents
A review of the Mitsubishi Motors Revitalization Plan: 1
A review of the Mitsubishi Motors Revitalization Plan: 2

Regional strategy
Japan, North America, Europe(Western and Central)

A review of the Mitsubishi Motors Revitalization Plan: 3
Positioning of the New Mid-term Business Plan

Focus markets and others(FY2008-FY2010)

Activities for improving profitability

The focus of Step Up 2010

FY2010 targets

Bolstering our strengths : Areas

Profit breakdown: FY2007 vs. FY2010

Bolstering our strengths : Product

Capital expenditure, R&D expenditure

New product launch plan
Bolstering our strengths : Environmental technology
Meeting European CO2 targets
Alliances
Sales volume targets
Improving global production efficiency

Financial strategy
Continuing and enhancing complianceand CSR activities
HR strategy
i MiEV: Next-generation electric vehicle

A review of the Mitsubishi Motors Revitalization Plan: 1
Reforming corporate culture and building solid profitability
Recover trust
Restore earnings

Support from Mitsubishi Heavy Industries, Mitsubishi
Corporation, Bank of Tokyo Mitsubishi UFJ(finances, personnel)

Breaking away from past corporate culture- Pervasive awareness and practice of compliance- Work to improve quality- Thorough implementation of ‘Customer First’Social contribution (Kidzania, The Pajero Forest)
Business Ethics Committee, made up of external experts

Positive
evaluation by
the Business
EthicsCommittee

Expand the number of global models
Restructure the sales network
Boost capacity utilization at domestic facilities
Rationalize production overseas
Strengthen and expand alliances
Slim down MMC Group from 200 to 112 companies

Building solid
profitability

3

A review of the Mitsubishi Motors Revitalization Plan: 2

4

In FY2005, operating profit was achieved one year early
In FY2006, net profit was achieved
In FY2007, solid profitability will be achieved
FY2004
FY2005All areas of income Operating profit
in the red

FY2006

FY2007

Net profit

Solid profitability(100 million yen)

FY05 Result
Operating income
Ordinary income
Net income

FY06 Result

FY07 Forecast(Announced Feb. 5)

68

402

800

（Revitalization Plan：-140）（Revitalization Plan：430）（Revitalization Plan：740）

- 178

185

600

（Revitalization Plan：-400）（Revitalization Plan: 210）

（Revitalization Plan：530）

- 922

87

200

（Revitalization Plan：-640）（Revitalization Plan：80）（revitalization Plan：410）

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A review of the Mitsubishi Motors Revitalization Plan: 3

お客様と徹底的に向き合った販売基盤の構築
Growth in emerging
markets, successful global vehicles fuel revitalization
Sales(100 million yen)
26,700Result / Feb. 5 forecast
Revitalization Plan

(100 million yen)
800

Result / Feb. 5 forecast
Revitalization Plan

24,30022,02921,201

Operating Income

740

402

21,600430

20,30068
FY2005

FY2006

FY2007

Sales volume （Retail, thousands of vehicles)
1,360
1,344
Japan
N. America
EuropeN. Asia

224

257

184

156

254

267

250

200

-140
FY2005

947

1,435

1,408
242

1,230

201

247

244
70%
Built-upvehicles

FY2006

267

278

982

218
246

282
130

80%
Built-upvehicles

288

234

237

142

180

Other
areas

221

230

217

265

225

FY05

1/28/2005
Revitalization Plan

228

1,085

168

Result

FY06

331
136

81%
Built-upvehicles153

227

Result

1,337

164

ASEAN

1/28/2005
Revitalization Plan

FY2007

1/28/2005
Revitalization Plan

321

FY07

Feb. 5
forecastPositioning of the New Mid-term Business Plan (FY2008-FY2010)
FY2005-FY2007
FY2005-FY2007

FY2008FY2008FY2009FY2009FY2010FY2010FY2011FY2011-

Revitalization
Step
Up
2010
RevitalizationPlan
Plan
Step
Up
2010
SustainablegrowthSustainablegrowthBuilding
solid
profitability
Building solid profitability Building the foundations of growth

Building the foundations of growth

trengths
s
r
u
o
g
n
i
r
Bolstey profit
d
a
e
t
s
g
n
i
r
Secu
Restore earnings
Recover trust

Stepping up
to the next stage

Support from the Mitsubishi Group ofCompanies (MHI, MC, BTMU)- Restore earnings in Japan and N. America- Environmental initiatives- Improving production efficiency to meetfluctuating demandContinuing and enhancing CSR activities

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The focus of Step Up 2010
A balance between…
Bolstering our strengths&

Securing steady profit

Ensure steady profit through cost reduction and ‘value chain’ enhancement

Improve production efficiency to meet global strategic needs
R&D into leading-edge environmental technologies

Investment for the foundation of sustainable growth

Building the foundations of growth

Expand models and sales volume in ‘focus’ markets

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Bolstering our strengths: Areas
Increase sales in ‘‘focus’
focus’ markets, competitiveness in mature markets
Mature markets

India

China

BrazilMiddle East

RussiaUkraineW. Europe

N. America

Japan

Strategy

Focus markets

Minicars / small cars
Mid-sized passenger vehicles
SUV
Environment

Environmental Tech
Clean diesel, TC-SSTi MiEV: Emphasis

Increase sales volume

Bolstering our strengths: Product9

Step Up 2010
Clarifies points of emphasis

Product direction
Financial responsibility

Mid-size• Pickup truckbased SUV • Global platform
variants

SUV• Small, fuel-efficient SUV

Minicars, small cars
Introduced during the
Revitalization Plan:• Small strategic vehicle• Electric vehicle- Mid-size Platform series- “i” minicar- Pajero, etc.

Environmental responsibility

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New product launch plan
Expanded sales of global models
through ‘bolstering our strengths’
Financialresponsibility

Expand number of mid-size platform models

Strengthened
segment
Mid-sized
passenger
vehicles

Add SUV based on one-ton pickup
SUV

Environmental
responsibility

Add small, ‘lower-impact’ SUV
Adapt minicars for overseas use, add global
modelsBring an electric vehicle to world markets

Minicars,
small cars

Bolstering our strengths: Environmental Technology[Pinnacle technologies]
Industry-leading, unique technologies- Launch of the i MiEV electric vehicle[Next-generation technologies]
Defining, ‘core’ technologies- Clean Diesel (FY2009-)- Expansion of TC-SST (FY2008-)[Base technologies]
Increasing environmental competitiveness- New MIVEC, FFV- CVT, high-efficiency transmissions

Clean Diesel
Automated Manual
Transmission (TC-SST)
Alternative fuel compatibility
Improved mileage in gasoline engines
Improved drivetrain efficiency
Reduced weight/improved aerodynamics

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Meeting European CO2 targets
Expand new technologies for better fuel economy;
reduce size and cut weight across the lineup
Base technologies<Image>¾ Idling stop
(Goal: Cutting weight in post-2010 models by 10%)

Next-generation technologies

CO2 Emissions¾ Weight reduction: lower: lighter

SUV

Average(all models)C-segment¾ New clean diesel, etc.
¾ TC-SST automated manual trans.

‘Green leader’ models¾ Minicars, small cars

A-segment

B-segment
New launch¾ i MiEV (planned)i MiEV

Weight13

Alliances
Expanding collaboration
Current collaboration(Pajero Mini)• [Japan] Nissan: Small commercial vehicle(Fall 2008)(AD/AD Expert)• Nissan: Cooperation regarding lightcommercial vehicle based on minicar-classcommercial vehicle in Japan and overseas

Future・ Founded lithium-ion battery venture with
GS Yuasa and Mitsubishi Corporation• [Japan] Nissan: Minicar (Fall 2008)

Under

Environmental
Technology

・ Joint development of diesel engine with
Mitsubishi Heavy Industries

Consideration

Components
received• PSA Peugeot Citroën ： D/E• Daimler: Gasoline engine, D/E• VW： D/E

Modelsreceived

Modelsreceived• [Japan] Mazda: Commercial vehicle• [N. America] Chrysler: Pickup• [Indonesia] Suzuki: Passenger vehicle

Modelsprovided

Modelsprovided• Nissan： commercial minicar, minicar• PSA Peugeot Citroën: SUV• Daimler: Gasoline engine

FY2008 and beyond• Expand OEM exchange models• Exchange of provided components

z Better able to meet customer needs thanks to received technology and productsz Production-side benefits including better capacity utilizationz Cut costs (R&D, fixed expenses, equipment investment)
D/E：Diesel Engine

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Sales volume targets
Expanded sales in ‘‘focus’
focus’ markets;-up vehicles
markets; volume
volume increase
increase ofof built
built-up<Retail sales>(Thousands of vehicles)

1,422

1,422
1,337

1,337
Asia and
other

Middle East, Brazil,
China, India

Parts foroverseas
assembly

BU

Russia, Ukraine

EuropeMain ‘focus’ markets

ic
veh

le s

%
3
1
+

Built-upvehicles

1,085

1,227

(% of total)

(81%)

(86%)

FY2007FY2010Central Europe

N. America
Japan

FY2007FY2010Note: Puerto Rico was included as part of N. America through 2007, but will be counted as “Asia and other” in 2010.

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Improving global production efficiency
Improving production efficiency to meet fluctuating demand
Increasing production of global models by shifting production to consumer markets
OkazakiOkazaki ->-> NedCar
NedCarOutlander
Outlander (for(for Europe)
Europe)(August,(August, 2008-)
2008-)

Managing
Managing increased
increased demand
demand・Avoid missed sales opportunities
・Increase production of global models

MakingMaking use
use ofof excessexcess capacity
capacitygainedbyproduction
shift
gained by production shift toto NedCar
NedCarRussian Production Faciltiy(under consideration)

Okazaki

NedCar (Netherlands)

Pajero Mfg., Ltd.

MMNA (N. America)

Mizushima

Mizushima
Mizushima ->-> NedCar
NedCar

MMTh (Thailand)

SUV,
SUV, other
other Europe-boundEurope-boundvehicle(s)vehicle(s)Global production capacity utilization 96%
92%

OEM

62%

MMAL(Australia)
Production stoppedby March 31, 2008

FY2004
Capacity

FY2007
Production

FY2010Cap. Utilization

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Regional strategy: Japan
Focus on profit because of market maturity;
maximize efficiency across the operation
Launch ‘uniquely Mitsubishi’ vehicles
Concentrate sales efforts on registered vehicles
Increase percentage of dealership sales

Strengthen aftersales, long-term connections
Improve service products
Increase customer satisfaction through better care and ‘people skills’
Increase customer loyalty

Increase efficiency of sales structure
Reduce fixed costs by cutting back-office staff
Build a high-efficiency sales network(Optimize area coverage across dealer network.)

OEM
OEM

Collaborative work with Nissan:Continue to provide minicars and commercial vehicles
Provide new minicar and receive new commercial vehicle (Fall, 2008)

BringJapan
Japaninto
intothetheblack
blackbyby20102010
Bring

Basicpolicy
policyandandpractices
practices
Basic

Increasing profitability in new cars

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Regional strategy: North America
Current
Currentstatus
statusImpending market slump in N. America; market uncertainty growing

Sales
Salesnetwork
networkimprovements
improvements

Improve productivity of dealers

Core-model focused promotions
Boost used-car resale value
Reduce incentives

Product
Product

Built-up
Built-upimports
imports

Locally
Locallybuilt
builtvehicles
vehicles

New Lancer series
Full lineup

Continue to enhance product(Model refreshes, etc.)(Evolution, Sport Hatchback)

Production
Production

Continue to cut cost and slim down operations
Increase export destinations

CanadaCanadaFirst introduction of Lancer Evolution
Expand sales network, build new parts warehouse

Promotingstability
stabilityininthe
theoperation
operation
Promoting

Sales
Sales

Increase dealer loyalty

Improving
Improvingbrand
brandvalue
value

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Regional strategy: Europe (Western and Central)
Current
Currentstatus
statusMaturity in Western European markets; growth in Central Europe
Market changes and slow SUV sales due to new CO2 tax regulations

Clearing
regulations
Clearing CO
CO22 regulations

Addressing W. European CO2
regulations

Launch small lightweight model; low-CO2

Strengthen sales network andincrease SUV sales in Central Europe

Product
Product

Built-up
Built-up imports
imports
Lancer series full lineup(Sedan, Evolution, Sport hatchback)emission models
Launch high-performance proprietary diesel
Make preparations for possible electric vehicle
launchLocally
Locally built
built vehicles
vehiclesColt lifecycle management

Production
Production

Move production of Europe-bound Outlander andother models to NedCar

Addressingenvironmental
environmentalissues;
issues;Addressing
salesininCentral
CentralEurope
Europesales

Salesoperation
operation
Sales

Sales
Sales improvements
improvements

Regional Strategy: ‘Focus’ markets and others
Strengthening sales in ‘‘focus’
focus’ markets‘Focus’ markets
RussiaRussiaUkraineUkraineMiddleMiddleEast
East- Expand sales network, fill out SUV-based lineup, strengthen partnership withlocal distributor- Consider building local production facility- Found company to manage sales, marketing, parts, and service

BrazilBrazil- Expand the locally produced vehicle lineup, including more flexible fuelvehicles

China
China

- Strengthen sales network handling Mitsubishi branded (built-up imports andlocally produced) vehicles

India
India

- Increase variety of locally produced vehicles (new SUV, etc.)- Strengthen network mainly in major cities (Delhi, Mumbai)

Other areas
ThailandThailand- Increase standing as a global export center with new models

Australia
Australia- Focus on and invest in import sales business

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Activities for improving profitability
Continue processes to secure steady profits
Strengthen
Strengthen cooperationcooperation acrossacross MMC
MMC GroupGroup

Process improvement- Minimize inventory and streamline management- Strengthen management of global logistics

Strengthen aftersales in mature
markets- Increase earnings on service- Increase earnings on parts and accessories

Strengthen cost-cutting measuresfrom R&D onward- Build new procurement structure- Systemize parts procurement management

Cut
Cutcosts
costs

ExpandExpandearnings
earnings

Cut
Cutcosts
costs

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FY2010 targets(100 million yen, thousands of vehicles)

FY07

FY10

Feb. 5 forecast

Target26,70027,600Operating income

800

900

Ordinary income

600

710

Net income

200

500

Sales volume

1,337

1,422

114/US$
161/EUR

105/US$
155/EUR

Sales(Retail)Assumed forex
rate
Note: Sales volume does not include OEM vehicles.

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Profit breakdown: FY2007 vs. FY2010- Lower materials costs- Process restructuring, etc.

Cost
cutting- Restructuring of Australian operation- Switch to proprietary diesel engine

Operational
improvements

R&D expenses
Depreciation- Environmental tech.
- New product, etc.
Assumed forex
rate

Forex

USD
EUR
AUD

’07
114
161
98

’10
105
155
90

- New models- More built-up vehicles

Model mix
+10bn yen

FY2007

2007年度
2/5 Forecast
700億円
Operating income
80 bn yen

FY2010TargetOperating income
90 bn yenCapital expenditure, R&D expenditure
Investment for the foundation of future sustainable profit
Capital Expenditure
90 bn yen / year

Making best use of current assets

84 bn yen / year

- NedCar (Netherlands)

Increase investment in focus areas- Environment (New paint facility at Okazaki)- More attractive product (for emerging markets)- Increase capacity - Improve production efficiency
A v era g e ex pendi ture per y ea r
(FY2005-FY2007)

A v era g e ex pendi ture per y ea r
(FY2008-FY2010)

R&D Expenditure
74 bn yen / year

80 bn yen / year

MaintainpositiveincreaseA v era g e ex pendi ture per y ea r
(FY2005-FY2007)

A v era g e ex pendi ture per y ea r
(FY2008-FY2010)

Expand use of distinctive technologies- Expansion of SUV line - Adapt minicars foroverseas - S-AWC - High-cap. TC-SST - FFV

Focus on buildup of environmental tech- Clean diesel - Mid-cap.TC-SST- Electric vehicle - Weight reduction of minicar
platform23

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Financial strategy(100 million yen)

¾ Balance sheet• Secure funds for capital and R&D expenditures

March 2007

March 2008

March 2011

ResultForecast

Forecast

Total assets

17,787

16,00017,000Interest-bearing debt

5,038

3,450

3,400

¾ Capital strategy• Continue deliberations on the future resumption of dividend payments

Continuing and enhancing compliance and CSR activities

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Toward the mutual benefit of company and society
Enhance activities to meet social responsibilities¾ Corporate Citizenship Promotion Office founded
Strengthen governance¾ Build solid structures for internal control

Business Ethics Committee¾ Continue third-party monitoring

Continue with compliance / CSR initiatives

Making CSR
our top priority

HR Strategy
Strengthening the personnel base for growth¾ Developing personnel appropriate to our business strategy• Training global leaders (training and rotation)• Improving the working environment, securing a variety of personnel¾ Skills and craftsmanship / Transmission of know-how• Expand the Monozukuri Dojo educational program overseas• Accelerate the re-hiring of veteran technicians

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Next-generation electric vehicle “i MiEV”
Accelerating the pre-launch quality check process
2006
Joint researchwith electric
power
companies

2007

2008

2009

2010

Early testing
Tokyo Electric Power Company, Chugoku Electric Power Co., Inc., Kyushu Electric Power Co., Ltd.,

Fleet testing•Tokyo Electric Power Company, Chugoku Electric Power Co., Inc.
•Kyushu Electric Power Co., Ltd., Kansai Electric Power Co., Inc.
•Hokkaido Electric Power Co., Inc., Okinawa Electric Power Co., Ltd.

¾ Plans for overseas fleet testing・N. America: Considering joint fleet testing withelectric power company
・Europe and other areas: under consideration¾ Founded battery company Lithium Energy Japan (Dec. 2007)• Investors: GS Yuasa, Mitsubishi Corporation, Mitsubishi Motors• Business: Development, manufacturing, and sales of large lithium-ion batteries• Start of production: Spring, 2009

¾ Found an office to manage
MiEV operations within MMC
LaunchAll statements herein, other than historical facts, contain forward-looking statements and are
based on MMC’s current forecasts, expectations, targets, plans, and evaluations. Any
forecasted value is calculated or obtained based on certain assumptions. Forward-looking
statements involve inherent risks and uncertainties. A number of significant factors could
therefore cause actual results to differ from those contained in any forward-looking
statement. Significant risk factors include:• Feasibility of each target and initiative as laid out in this presentation;• Fluctuations in interest rates, exchange rates and oil prices;• Changes in laws, regulations and government policies; and• Regional and/or global socioeconomic changes.
Potential risks and uncertainties are not limited to the above and MMC is not under any
obligation to update the information in this presentation to reflect any developments orevents in the future.
If you are interested in investing in Mitsubishi Motors, you are requested to make a final
investment decision at your own risk, taking the foregoing into consideration. Please notethat neither Mitsubishi Motors nor any third party providing information shall be responsible
for any damage you may suffer due to investment in Mitsubishi Motors based on theinformation shown in this presentation.