Additional Measures to Achieve
Business Revitalization Plan Targets

Yoichiro Okazaki, Chairman and President
June 16, 2004
1Introduction
Mitsubishi Motors once again apologizes for the spate of recall problems,
leading to the arrest of former executives including a former president, andthe continued concern and trouble we have caused. We also pay ourdeepest respects to the spirits of the two victims who had died, andapologize to their families.
Each employee takes the recent scandals very seriously and we willcontinue to tackle the challenges posed in our last chance for survival bystrengthening compliance to reform our corporate culture and ensure thetargets outlined in our business revitalization plan are achieved. We will
work to regain your trust as soon as possible and turn ourselves into a
company that can make a positive contribution to society.
To do this, we have already implemented measures to enhance compliance.
To improve our profit structure, we have outlined and will implement a
number of additional measures that we can undertake ourselves to stave off
any risks from domestic sales.
2Last Chance: Stepping up to the Challenge
Absorb the risk of further volume decline in Japan, by accelerating &adding initiatives to improve profit structure (prioritize initiatives thatcan be done on our own)
(JPY 100M)
Risk of further volume decline in Japan and such Initiatives(Operating Profit basis)
Risk ofRisk ofRisk offurther volume

Initiatives

further volume

decline in Japan+82

300 → 220

340 → 260

K units

K Units

344

FY04

Initiatives

decline in Japandecline in Japan+44300further volume

Initiatives

30000382

FY05

FY063

Last Chance: Stepping up to the Challenge
Measures to counter downside risks of domestic sales(JPY 100M)

All-out cost cutting

FY04

FY05

Labor Cost-141-109

SG&A-153-203

Others-50-70

Total-344-382

Restoring customer trust

Across-the-board compliance41. All-out Cost Cutting
Additional labor cost savings: FY04 –14.1 billion yen; FY05 –10.9 billion yen(JPY 100M)
Labor cost savings in revitalization plan-230

After including risk measures

-230
-133

-141-133

Total: -363
FY04

FY05

Total: -613

-109

FY04

FY05

[Additional initiatives]• Executives: Forgo retirement allowances, remuneration cuts (-30% to - 50%)
in FY04/05• Managers: 10% on year cut in remuneration in FY04/05※• Rank-and-file: 5% cut in monthly salary in FY04/05• Cancel 2004 year-end bonus ※• Accelerate headcount reduction; review employment, etc.
※
• Review pension rates (4% → 1.5%)※ Items that have been negotiated with Union51-2. All-out Cost Cutting
Initiatives

FY04

FY05

80

1207383

(153)

(203)

(50)

(70)

(JPY 100M)

1-2. 聖域なきコストカットDom.
• Suspend all new IT projects, except regulation
related project• Additional reduction of dom. advertisementcost• All-out cost cutting at HQ & R&DSG&AOverseas• Reduce outsourcing, travel, system related costby half
• Advertisement & SG&A by focusing key models• Accelerate the cost reduction of spare parts,
accessories and indirect materials

OtherCost• Headcount reduction by bundling sub-lineoperations, Accelerate product efficiency• Additional reduction of packing• Additional reduction of export expenses byreviewing outsourcing partners

62. Restoring Customer Trust in JapanFor all drivers of Mitsubishi cars…

FreeFree vehicle
vehicle inspections
inspections−20-point inspection−−20-point
inspectionand
andoiloilchangechange−…on offer now!
For peace of mind for new purchasers…

33-year-year full
full support
support program
program−Free inspections;-hour roadside−−Free
inspections;2424-hourroadsideservice
service−…on offer now!
7

3. Product Plan

As announced in May 21 Revitalization Plan, we havealready started new product developments which are inline with “SUV DNA” “Sporty DNA” characterized as
robust and driving, and this approach has not beenchanged.

In this fall, we are to hold “new car concept preview”,
to present all new vehicles to be introduced by the endof FY07.

8

4.1 Management Philosophy

Compliance
Compliance First
First
SafetySafety First
First
Compliance
Compliance FirstFirst Initiatives
Initiatives
1.1.Integrate
Integratecompliancecomplianceand
andcommunication
communicationfunctions
functionsinto
intoCSR
CSR
Promotion
OfficePromotion Office
2.2.BusinessBusinessEthics
EthicsCommittee
CommitteetotosupervisesuperviseCSR
CSRPromotion
PromotionOffice
Officeunderpublicscrutiny
under public scrutiny
3.3.Completely
Completelyrethinkrethinkcyclecycleofofplanning,planning,implementing,reviewing
toensure
implementing, reviewing to ensure
thoroughthoroughcompliance;compliance;have
haveallall
executives
signacomplianceexecutives sign a compliancepledge
pledgeCustomers
CustomersFirstFirst
SafetySafety FirstFirst Initiatives
Initiatives

Customers
Customers FirstFirst Initiatives
Initiatives

1.1.Consolidate
Consolidateplatforms
platformstotofocus
focus
R&D/manufacturingresources
R&D/manufacturing resources
2.2.Model-specific
Model-specificProductProductExecutive
Executive
tototaketakecharge
chargeofofend
end-to-end-to-endproductproductlifecycle
lifecycle
3.3.Quality
Qualitydepartments
departmentsatatplant
planttotobebe
shiftedtoheadoffice
Qualityshifted to head office Quality
Assurance
AssuranceOffice
Office4.4.Corporate
CorporateAudit
AuditDept.
Dept.totoaudit
audit
Quality
Assurance
Officeon
Quality Assurance Office onstatus
statusofofquality
qualityassurance
assurancechecks
checks
5.5.Consider
Considercompany-widecompany-wideincentives
incentives
asasreward
forquality
improvements
reward for quality improvements
ininR&D/manufacturing
R&D/manufacturing

1. C o n s o l i d a t e P R / I R t o c e n t r a l i z e a n d
1. C o n s o l i d a t e P R / I R t o c e n t r a l i z e a n d
actively disclose information
actively disclose information- Analyze/disclose cause of past scandals- Analyze/disclose cause of past scandals- Audit/disclose Quality Assurance Office- Audit/disclose Quality Assurance Office
operations (twice a year)
operations (twice a year)- Include opinion of stakeholders in- Include opinion of stakeholders inmanagement issues
management issues
2. Improve customer satisfaction
2. Improve customer satisfaction- Dealer standards to improve sales and- Dealer standards to improve sales andservice quality, verify with CSI/SSIservice quality, verify with CSI/SSI- Strengthen R&D capabilities (based on- Strengthen R&D capabilities (based on
consumer needs)
consumer needs)- Strengthen brand strategy- Strengthen brand strategy
3. Consolidate advertising activities
3. Consolidate advertising activities- Communicate uniform message- Communicate uniform message- Effective media mix- Effective media mix- Communicate messages matched to- Communicate messages matched to
public needs
public needs

94.2 Enhanced Internal Auditing/Transparency
CSR
CSR Promotion
Promotion Office
OfficeCSR Promotion Office/Business Ethics Committee
Secretariat

ER Dept.

IR Dept.

Compliance

PR Dept.

Compliance Dept.

Customer Relations Dept.

Corporate Audit Dept.

Customers
CustomersFirst
First
Initiatives
Initiatives

Monitor status
statusMonitor

SafetySafetyFirst
First
Initiatives
Initiatives

Compile results
results ofof monitoring
monitoring
CompileCompliance
ComplianceFirst
First
Initiatives
Initiatives

BoD
AdviseBusiness EthicsCommittee
CommentRegular announcementsof monitoring results

Communications

Internal
Internal auditing
auditing toto monitor
monitor work
work

Line functions

Incorporate
Incorporate
external
externalopinions
opinions
into
into daily
daily
workwork

10

4.3 Compliance/Quality Assurance Organization
Compliance
Compliance

Quality
QualityAssurance
Assurance【 Old 】【New】

Chairman's Office

CSR Promotion Office

R&D
R&D Office
Office【New】
Quality
Quality Assurance
Assurance Office
OfficeVerify R&D quality

External relations(govt.)【 Old 】

Compliance Dept.

Corp. Comm. Office
Customer Relations Dept.

Procurement
Procurement OfficeOffice

Quality strategy

Bought-parts quality
R&D quality assurance

After-sales
After-sales Office
OfficeCustomer relations
Public relations(incl. internal/net comm.)

Corporate Audit Dept.
(incl. audit of Quality Assurance Office)Bought-parts quality

PlantsPlantsCorporate Affairs Office
Auditing

Analyze customer complaints(incl. find quality problems)

PR Dept.

Quality assurance of
final products/in-house parts

Shipment quality(final products/in-house parts)(incl. risk management)

Compliance

IR Dept.

Quality
Quality Mgmt
Mgmt OfficeOfficeMarket quality assurance
Quality strategy

CFO
Investor relations

ER Dept.

(incl. analyzing complaints/market info)

Analyze market info
Deal with govt. on quality

Deal with govt. on quality

114.4 Schedule for Compliance First
Compliance is obeying the law, international rules and company regulations as well as acting in line with social norms

Chairman & President declare upholding business ethics main priority
June 29, 2004
Reworkorganization,framework,regulations forbusiness ethics

Compliance pledge by executives

July 2004
Corporate ethics
seminar for all
executives
July/August 2004

Business Ethics
Committee
CSR Promotion
OfficeMeeting on businessethics problems inall departmentsAugust/September2004

Surveyofall
employeesondepth of businessethics in company

Draw up plan for2005
business
ethics initiatives
November 2004
Business
EthicsCommittee study on
extentofestablishment
ofethics in the company
End October 2004

Compliancepledge by all
employees
End September 2004

September 2004

12