Mitsubishi Motors Mid-term Business PlanFY 2011－2013“Jump 2013”

Jan. 20th, 2011

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Contents
Reviewing “Step Up 2010”

Improving the Quality Level

Outlook of Business Conditions

Reforming the Cost Structure

Positioning of the New Mid-term

Alliance Strategy

Business Plan(FY2011-FY2013)
Profit Targets
Focus of “Jump 2013”
Capital Expenditure, R&D Expenditure
Sales Volume Targets
Financial Strategy
Product Strategy
Compliance and CSR Activities
Regional Strategy
Environmental Initiative Program 2015
Global Production Structure

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Reviewing “Step Up 2010”

Building the foundation of growthTargetTarget at
at thethe timetime ofofannouncement
announcement

StatusStatus ofof achievement
achievement

Decrease in total demand,
shift in demand structure andSecuring
steadyprofitsudden appreciation of yen

Adjusted sales volume & profit target

Bolstering
ourstrength

Securing
steadyprofitSteady accomplishments
・ Introduction of environmental technologies （New Generation
Electric Vehicle “i-MiEV” ）・ Launching of global strategic model （New Compact SUV）
・ Expansion of business alliances （PSA Peugeot Citroën andNissan）
・ Business expansion in emerging markets （JV in China)

Bolstering
ourstrength3

Outlook of Business Conditions
Market demandby region

Economic
Economic outlook
outlookGrowing presences of China and otheremerging markets

68

83(million units)

68
Emerging
markets

Continuation of instable environment inmature markets

Maturemarkets

Oil/Resource price to stay highIncreased environmental consciousness /increased frequency of extreme weather

DemandDemand forecast
forecast

CY2007

CY2010CY201383

68

Market demandby segment
68(million units)
Below Csegment

Expansion of global demand driven
by emerging markets
Emerging market’s share to grow up to 1/2
in 2013 from 1/3 in 2007
Compact cars below C-segment to takethe lead role in the market expansion

Above Dsegment

CY2007

CY2010CY2013(Passenger vehicles + light commercial vehicles, ex. heavy commercial vehicles)
Source: Global InsightPositioning of the New Mid-term Business Plan (FY2011-FY2013)
FY2005～FY2007

FY2008～FY2010

FY2011～FY2013““Mitsubishi
Mitsubishi Motors
Motors
Revitalization”
Revitalization Plan
Plan”““Step
Step Up”Up 20102010”““JumpJump 2013”
2013”
GrowthGrowth andand Leap
Leap forward
forward

Building
Building solid
solid profitability
profitability

Building
Building thethefoundation
foundation ofof growth
growthLehman shock

Restore earnings
Recovering trust

Bolstering our strength
Securing steady profit

Emerging markets/environmental initiatives
Raising the bar on profit level4Focus of Jump 2013
Basic Policy““Growth
Growth and”and Leap
Leap forward
forward”

Business Strategy
・ Concentrate business resources in emerging markets& environmental initiatives( R&D )
Strengthening global strategic models/eco-car models
models/eco-car( Production ) Increasing production capacity in emerging markets while
adjusting it to natural demand in mature markets( Sales )Fortifying involvement in sales business in emerging
emerging markets
markets

・ Reforming the cost structure
・ Pursuing business alliance opportunities for profit increase・ Reinforcing business foundation(( Financial
ance activities
Financial ground,ground, Human
Human Resources,
Resources, productproduct quality,
quality, CSR/compli
CSR/complianceactivities ))5

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Sales Volume Targets
Expandinge markets
Expanding sales
sales inin emerging
emerging markets
markets && stabilizing
stabilizing sales
sales inin matur
maturemarkets＜Retail sales＞

1,370
1,124

China
1,000

RussiaEmerging
markets

Maturemarkets（000 units）

ASEAN
Oceania
Europe*1
N. America

BrazilJapan
FY2010
Forecast
Currentcount

FY2010
Forecast
Renewedcount※1 Excluding Russia, Ukraine, Kazakhstan※2 Change in counting method: excluding models that are not under Mitsubishi brand

FY2013
TargetRenewedcount

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Product Strategy

EV/PHEV
Green Technology”
EV/PHEV Technology
Technology && ““GreenTechnology”
Enhancing
Enhancing Global
Global Strategic
Strategic Models
Models~~ Emerging
Emerging Markets
Markets asas thethe Focal
Focal Point
Point ~~MITSUBISHI Concept Global SmallProduct Strategy ~ EV/PHEV Technology & “Green Technology” ~※EV/PHEV
Shiftingto
toElectricElectricEnergy
Energy]]EV/PHEV※ Technologies
Technologies [[Shifting

Expansion of EV/PHEV
Global rollout of i-MiEV
Expanding the EV lineup
New introduction and expansion of PHEV
Providing EV technologies to others※ Electric Vehicle and Plug-in-hybrid vehicles-based Energy
Improving
Green Technology” [[Conserving
ConservingOil
Oil-based
Energy]]Improving ““GreenTechnology”

Improving the existing technologies ( IC engine, etc )New introduction of Hybrid model
Advancing gasoline/clean diesel based engine(Expanding idling-stop system usage, next-generation MIVEC engine, etc)

Lightweighting the car body8

Product Strategy ~ EV/PHEV Technology & “Green Technology” ~EV/PHEV
EV/PHEV Technology
Technology
Launching total of 8 electric vehicles/plug-in hybrid vehicles by FY 2015
FY2011

Commercial mini EV

FY2012FY2013

FY2014-15
EV

PHEV

EV
PHEV

(MINICAB-MiEV)

PHEV

PHEV

PHEV

““Green
Green Technology”
Technology”
Next-generation M
IVEC engine ( FY
2011~ )
Next-generationMIVEC
FY2011~Hybrid vehicle ( FY2013~)
FY2013~9

Product Strategy ~Rolling out “Global Strategic Models” focusing on Emerging Markets~

10

Introducing affordable & fuel efficient compact car “Global Small”
・ Begin production in Thailand in FY2011
・ Sequentially start export to ASEAN, Japan, US, Europe from FY2012

Expanding the SUV lineup in emerging market
・ Respond to wide range of demand, including the emerging markets
・ Deliberate on 1 ton pick-up development/production corporation
with Nissan

Discontinuing region-specific model・ Cancel launch of successors for US/Europe region-specific models

Minicar: deliberating joint venture with Nissan
・ Collaborate in product planning/developing of minicar

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Regional Strategy

Mature markets

Solidify profitability

Sales volume : increase 90,000 units( FY2010 ⇒ FY2013 )Precede in environmental technology,
further business efficiency

FY2010
Forecast

Emerging markets

Increase in profit

FY2013
TargetSales volume : increase 280,000 units( FY2010 ⇒ FY2013 )Expand business by launchingcompact/fuel efficient/affordable
models and SUV

FY2010
Forecast

FY2013
TargetRegional Strategy ~ Mature Markets ~

Japan

North
America※
Europe※12

Building solid profitability( Strengthen after-sales / Deliberate minicar
after-sales
minicar joint venture with Nissan )Bolstering production/sales business( Launch new US produced model )Enhancing environmental brand value( Accelerate expansion of eco-car models prior to CO2 regulations )eco-car※Excluding Russia, Ukraine and Kazakhstan

Regional Strategy ~ Emerging Markets ~
ASEAN

13

Launch/export of ““Global
Global Small
Small””( Construct new factory in Thailand )Local production/sales of new SUV

Russia( Increase local procurement to further enhancecost competitiveness )China

Reinforced production/sales ability by
establishing a new 50/50 joint venture company

BrazilStrengthening product lineup
Expand supply to MERCOSUR, Andean Community( Deliberate capital injection to local partnership )14Global Production Structure
Developed
adjustingprod.
prod.capacity
capacity
DevelopedCountries:
Countries: adjusting

Emergingenhancingprod.
prod.capacity
capacity
Emergingcountries:
countries: enhancing

Breakdown
Breakdown ofof Japan/overseas
Japan/overseas production
production

・ U.S. :rollout new locally produced models
・ Netherlands : cancel Colt successor model・ Japan :increase minicar production bycollaborating in joint venture・ Thailand: construct 3rd factory・ China:increase production capacity
・ Brazil:increase production capacity
・ Russia: full-scale SUV production
Breakdown
Breakdown ofof Overseas
Overseas production
production（000 units)（000 units)

1,580
1,100
Overseas
production

850

54%

44%

Emerging
countriesJapan
production

480

90%

84%

US/Netherlands

FY2010
Forecast

FY2013
Target

FY2010
Forecast

FY2013
Target15

Improving the Quality Level
Globally
Globally expanding
expanding Mitsubishi
Mitsubishi brand
brand quality
quality level
level
Building a structure to globally sustain the quality level,
as we increase production facilities in emerging countries
Development:
・ Thorough utilization of “Dev. Quality Improvement Tools”
・ Thorough assessment of global vehicle running environment,
and compatibility assessment

Production:
・ Expansion of overseas factory incorporating MMC

HR Bank
Develop.

Product.

Procure.

Qualityproduction method as well as quality control methods

・ Foundation of overseas human resource bankMarket:・ Timely correspondence to market information by creating

Quality Affairs

ProblemSolvingTeam

Problem Solving Team・ Improving information collection speed & accuracy, byincreasing expatriates

Market Info.
Window

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Reforming the Cost Structure
Forming
Cost Reduction”
Forming ofof ““Cost
Reduction Implementation
Implementation Committee
Committee”
・ Direct control under president
・ Material cost reduction monitoring system
・ Periodic follow-upfollow-up

Fundamental
Fundamental
reformation
reformation ofofmaterialmaterial cost
cost reduction
reduction

AimingAiming toto securesecure cost
cost competitivenesscompetitiveness at
at global
global level
level~ Aim to reduce material cost by 90 billion yen level in comparison to FY2010, by FY2013 ~ExpandExpand overseas
overseas procurement
procurement～
Promote overseas～Promote
overseasprocurement
procurementforJapanese
produced
for Japanese producedmodels
models～～Strengthen
Strengthen cost
cost reduction
reduction activities
activities～
Strengthen collaborative～Strengthen
collaborativeefforts
efforts
withoverseas
production
hub～with overseas production hub～

FY2010 (Forecast)

Overseasprocurement rate :18%～
Expand scale～～Expandscalemerit
meritforforcommon
commonparts
parts～

25%
25%

15% decrease-segment platform
decrease inin CC-segment
platform
End of FY2010(Forecast)

PromotePromote cutbacks
cutbacks in
in #s
#s of
of platforms
platforms

FY2013 (Target)# of platforms：
platforms：

12

End of FY 2013 End of FY2015(Target)(ref.)

9（（Prod.
Prod. volume/platform） （（92,000
92,000 units） （（176,000
volume/platform #s#s）units）
176,000 units）
units）

66

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Alliance Strategy
Pursuing
Pursuing businessbusiness alliances
alliancesz Supplement product/technology to better fulfill customer needsz Improve efficiency/capacity utilization at factoriesz Cost reduction in R&D expenditure, fixed expenses, facility investments, etc.

Current collaborations
ModelsProvided
Models
Received

・ Nissan： commercial minicar,
passenger minicar, mini SUV・ PSA Peugeot Citroen：SUV, EV
・ Nissan： small commercial car
・ Mazda： commercial car

Tech.
Assist・ Proton： assistance in passenger car
development/license production

Factory
Operation

・ PSA Peugeot Citroën ： vehicle
production in Kaluga factory, Russia

Green Tech.

・ Lithium ion battery venture with GS
Yuasa, Mitsubishi Corp.

FY2011~ModelsProvided

・ PSA Peugeot Citroën ： compact SUV
・ Nissan： SUV for Middle East market

Models
Received

・ Nissan： commercial car
・ Suzuki ： passenger car

EV Develop.

・ PSA Peugeot Citroën ： Commercial EV
to begin production around end of 2012

Under
Deliberation

・ Nissan： formation of joint venture forminicar product planning/development,
collaborating in Nissan pickup truck
production in Thai factory, as well as
prod/develop. of successor model.
Receiving upper-class sedan modelfor Japanese market

Increasing-earning opportunities
Increasing profit
profit-earning
opportunities // Bolstering
Bolstering profitability
profitability

18Profit Targets（100 million yen / 000 units)

FY2010FY2013( Forecast )( Target )Sales Volume (Retail)1,000 ※

1,370

Sales

19,00025,000Operating Income

450

900

Operating Income Ratio

2.4%

3.6%

Net Income

150

450

Net Income Ratio

0.8%

1.8%

US$ ¥85
Euro ¥113
Aus.$ ¥80

US$ ¥90
Euro ¥110
Aus. $ ¥75

Assumed forex. rate

※Displayed in renewed count (current count: 1,124）
Change in counting method: excluding models that’s not under Mitsubishi brand19

Capital Expenditure, R&D Expenditure
Focusing
es
Focusing investment
investment inin emerging
emerging market
market && environmental
environmental initiativ
initiatives
CapitalCapital expenditure
expenditure
Respond to the growing demand in emerging market⇒Production of “Global Small” in the new Thai factory

90 bn yen / year
65 bn yen / year

increase development/production expenditure for“Green” cars

40% increase⇒expanding EV lineup

Improve production efficiency

R&D
R&D expenditure
expenditure
Propel development to match emerging market’s
needs⇒compact/affordable/fuel efficient, SUV, etc.

Average expenditure per
year during FY2008FY2010 (Forecast)

Average expenditure per
year during FY2011FY2013 (Target)

70 bn yen / year
54 bn yen / year

Focus development on environmental technology⇒Developing EV/PHEV and their components

30% increase

Improve existing technology⇒Fuel efficient, low CO2 engine, lightweighting the car body

Average expenditure per
year during FY2008FY2010 (Forecast)

Average expenditure per
year during FY2011FY2013 (Target)

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Financial Strategy
Balance
Balance sheet
sheet
While focusing on emerging markets/environment-related investments and R&Ds,
also strives to improve cash flow, and promote squeezing of interest-bearing debt
(100 million yen)March 2010
ResultMarch 2011
Forecast

March 2014
Forecast

Total assets

12,587

12,60014,520Interestbearing debt

3,927

3,640

3,360

（Excluding NorthAmerica ABS*)

3,584

3,440

2,800

CapitalCapital strategy
strategy
Aiming resumption of dividend payments during this Mid-term Business Plan period*ABS：Asset Backed Securities

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Compliance and CSR Activities
Towards
Towards aa sustainable
sustainable future
future people
people living
living inin harmony
harmonywithhrough theswith societysociety andand thethe earthearth tthroughthe carcars
Promote activities to enhance“trust of society”

Local
communities

・ Strengthen compliance awareness activities
・ Strengthen corporate governanceBusiness Ethicsof Mitsubishi
Motors・ Continue check system by the Business Ethics
Committee

Promote activities to meet“expectation of society”

Customers

Corporate Philosophy

Expectation by society
Contribution
to society

Employees

Compliance
first・ Overseas audit of quality assurance checking
・ Reinforced global environmental management

Safetyfirst

Customers
first

Corporate governance・ Development of employee participation in social
contributions

・ Global expansion of compliance and CSR activities

Shareholders
andinvestors

Expectation by society

・ Realization of low-carbon, recycling-oriented
society and promoting efforts to reduce
environmental load

Expand the activities to global level

Contribution
to environment

Distributors/
Dealers

Concept of CSR activities

Business
partners

Mitsubishi Motors Environmental Initiative Program 2015
-FY2015)Layout-term Environmental(FY2011-FY2015)
Layout ofof New
New Mid
Mid-term
Environmental Initiative
Initiative Program
Program 2015
2015 (FY2011

Production

Products

Set up the mid point target to achieve “Environmental Vision 2020”

FY2015 Target
FY2015
TargetFY
2020 Target
FY2020TargetReduce by
25％

Reduce by50％

Production ratioof EV and PHEV

5％
and above20％
and above

Per-vehicle
CO2 emissions

Reduce by
15％

Reduce by
20％

CO2 emissions
for new products*Versus 2005 global
lineup average*Versus 2005

22

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Additional
Additional information
information

MINICAB-MiEV, Commercial mini EV

《For reference》 Changing in counting definition of retail units

ChangeChangeCurrent definition

Count retail unit including other brands models which MMC
designed and reward its royalty** Example products: former Lancer(V3) for Southeast (Fujian) Motor of China, former Pajero (Liebao) for GAC
Changfeng Motor of China, and Veryca, Light commercial vehicle for CMC of Taiwan.

Renewed definition

Count only MMC brand retail unit since FY2011

24

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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 anduncertainties. 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 notunder any obligation to update the information in this presentation to reflect
any developments or events in the future.
If you are interested in investing in Mitsubishi Motors, you are requested tomake a final investment decision at your own risk, taking the foregoing into
consideration. Please note that 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 the information shown in thispresentation.