TOKYO – Mitsubishi Motors has begun making final arrangements for the closure of an automotive plant in the Pajero Manufacturing subsidiary within 3 years, Nikkei heard on Wednesday of resources close to the matter.
Pajero’s manufacturing plant, located in the town of Sakahogi in Gifu Prefecture, has produced cars such as the Pajero game application vehicle, but its production rate has stalled due to falling sales.
Mitsubishi Motors will also stop production of Pajero cars, which it has continued to export, around 2021. The plans will be included in the automaker’s new medium-term control plan to be announced on 27 July, depending on the resources.
In Japan, Toyota Motor will also close a factory of the Higashi-Fuji corporate organization in Shizuoka Prefecture, Susono city in late 2020, while Honda Motor will close its Sayama plant in Saitama Prefecture, Sayama City until fiscal year 2021.
Japanese brands are looking to lower their production capacity above the top as the domestic new car market shrinks.
Pajero’s manufacturing plant has stopped generating Pajero cars for the domestic market in 2019. The plant has lately produced Pajero SUV for export and Delica D: five minivans and SuV Outlander.
The plant manufactured 63,000 cars in fiscal 2019, representing approximately 10% of Mitsubishi Motors’ total domestic production.
With the closure of the plant, Production of Delica and Outlander cars is expected to be transferred to Okazaki Manufacturing, a subsidiary of Mitsubishi Motors in Okazaki, Aichi Prefecture and elsewhere.
Most of the approximately 900 workers at the Pajero manufacturing plant will likely be reassigned. This will be the first national Mitsubishi Motors plant to close in about 20 years. In 2001, he closed the company’s Ooe plant in the capital of Aichi Prefecture in Nagoya.
Mitsubishi Motors agreed to the acquisition of Nissan Motor in 2016 and joined the automotive alliance between its largest national rival and French car manufacturer Renault, as its functionality deteriorated due to a fuel economy scandal.
Former Nissan Chairman Carlos Ghosn doubled as Mitsubishi Motors’ chairman and pushed ahead with a global expansion strategy with an eye on boosting that company’s market share in major countries in the world.
But Mitsubishi Motors’ sales expansion has been slow and the car manufacturer’s constant load has increased. The automaker struck another blow through a sharp drop in demand for new cars due to the pandemic of the new coronavirus.
Mitsubishi Motors’ new medium-term control plan will require constant price relief of approximately one hundred billion yen ($935 million). The closure of the Pajero manufacturing plant will be a pillar of these cost-cutting efforts, according to the sources.
Pajero Manufacturing’s predecessor is Toyo Koki, which was created in 1943 to produce aircraft parts. After World War II, it has become a corporate production body, generating Pajero and other cars, basically for Mitsubishi Motors, contractually.
Mitsubishi Motors made the company its subsidiary and renamed it Pajero Manufacturing in 1995. Mitsubishi Motors made Pajero Manufacturing its 100 percent subsidiary in 2003.
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