Mitsubishi Motors Corporation announces the introduction of a new mid-term management plan called RM2001. In addition to setting out the company's business plans up to the year 2000, RM2001 also incorporates the specific measures detailed in the "Corporate Structural Reforms" announced on 10 March 1998, as well as several new measures formulated since.

The primary objective of RM2001 is to put the company on a profitable footing at the earliest possible time. To this end, the management plan calls for a restructuring that will enable the company to post an appropriate profit by the year 2000 without relying on any incremental growth in sales volume.

The Mitsubishi Motors group of companies will work towards achieving this target with all officers and employees sharing a collective sense of responsibility.

Mitsubishi Motors must carry out the RM2001 mid-term management plan in a global environment of contracting credit. Everyone in the Mitsubishi Motors group of companies will work to reduce total assets and borrowings, and to strengthen ties with other Mitsubishi group companies and the financial institutions with which they have dealings.

In addition to the measures announced today, the company will bring out other improvement measures, details of which will be announced as they are finalized.

RM2001 OUTLINE

1. Management Targets

• 1999FY
  • Non-consolidated operations: To resume payment of dividends
  • Consolidated operations: To move into surplus
  
  
• 2000FY
  • Non-consolidated operations (minimum target figures)

    Sales volume	1,200,000 units
    Sales	2,500 billion yen
    Ordinary profit	50 billion yen
    Net profit	10 billion yen

    
    
  • Consolidated operations (minimum target figures)

    Sales	4,000 billion yen
    Net profit	20 billion yen

    
    
  • Interest-bearing liabilities
    • To reduce consolidated interest-bearing liabilities to 1,300 billion yen by the end of 2000FY.

2. Restructuring Measures

The company will introduce the measures detailed below in order to further improve quality and customer satisfaction by developing just-the-right products, by reducing the number of models and by increasing the use of common platforms, and also in order to raise productivity through uncompromising rationalization, and thereby respond to changes in the market without depending on incremental growth in sales volume.

(1) Reduction in number of passenger car models and platforms

• Reduction in number of passenger car models
  • The company plans to reduce the number of current registered models in its lineup by some 40%.
  
  
• Introduction of new concept vehicles (including the Smart Utility Wagon series)
  • The company will introduce, in a timely manner, new concept models in what are expected to be the growth segments of the market. Development resources will be concentrated on three series: SUW, PAJERO and mini-cars.
  
  
• Greater use of common platforms (reducing current number from 12 to 6)
  • Starting with the new mini-car series introduced in October this year, the company is working to gradually reduce the number of platforms used in its lineup. In conjunction with this, the company will reduce the number of variations and trim levels in each model series, and will also increase the ratio of carry-over parts and components used.

(2) Cost reductions

• 350 billion reduction in three years
  • The company forecasts that it will meet its 85 billion yen cost reduction target for fiscal 1998.

(3) Restructuring of production organization in Japan

The company plans to restructure its production organization in Japan, while maintaining employment levels.

• Streamlining of truck production operations
  
  
  • The company will streamline its truck production facilities to enable it to operate profitably on the basis of an annual production volume for the Japanese market of 80,000 units.
    • Integration of the Maruko Plant into the Kawasaki Plant (by 2002FY)
    • The company will reexamine production volumes and in- and out-sourcing arrangements, and will promote the integration and/or shutting down of production lines, and the integration of development and testing facilities.
    • Integration of the Nakatsu production line into the Kawasaki Plant (by 2001FY)
  
  
• Streamlining of passenger car production operations
  
  
  • The company will reorganize the Oye Plant and Kyoto Plant production lines (by 2002FY)
    The company will rationalize the Oye and Kyoto Plant production lines by reexamining production volumes, redistributing tasks and promoting the integration and/or shutting down of production lines.

(4) Streamlining and integration of Japanese market sales companies

• FUSO brand truck and bus sales companies
  • Starting in the current fiscal year, the company will restructure the FUSO brand sales organization to bring it into line with the size of market.
  
  
• Passenger car sales companies
  • Starting in the current fiscal year, the company will initiate a suitable restructuring of the passenger car sales organization around its best-performing sales companies.

(5) Overseas operations

• North America
  
  
  • Mitsubishi Motors is working to ensure both MMSA and MMMA post profits in fiscal 1998, and to put them on a footing of continuing profitability from fiscal 1999 onwards.
    • The company is working to make Mitsubishi Motor Sales of America, Inc. and Mitsubishi Motor Manufacturing of America, Inc. profitable on the basis of an annual sales volume of 200,000 units and annual production volume of 160,000 units respectively. Measures include strengthening the sales organization, reducing the cost of sales and other expenses, and making reductions in manufacturing costs.
    • The company plans to reduce payroll in the MMSA group and at MMMA by 1,000 by fiscal 2000.
    • The company will reexamine the management base of the sales finance company Mitsubishi Motors Credit of America, Inc. (MMCA)
    • The company will examine the introduction of a fourth core model to join the current GALANT, ECLIPSE and MONTERO SPORT series.
• Europe
  
  
  • Mitsubishi Motors is working to put the MME group of companies on a footing of continuing profitability.
    • The company is working to achieve sales volume of 330,000 units (locally produced vehicles included) in the year 2000 through a further strengthening of the marketing organization and the introduction of various measures designed to promote rationalization.
    • The company will continue to actively introduce models powered by the GDI ecology engine.
• Thailand
  
  
  • Mitsubishi Motors is working to put its operations in Thailand up to break-even point in 1998 and onto a profitable footing from 1999 onwards by building up exports from, and by restructuring operations in, Thailand. Measures include:
  • Building up exports, principally of pickup trucks
  • Selling off the Lardkrabang Factory and head office building
  • Reducing payroll from 4,000 to 2,800

(6) Reexamination of size of organization, payroll

• Mitsubishi Motors will reexamine the size of its organization.
  
  
• The company will bring forward its planned reduction in indirect personnel from 2000 to 1999:
  • The company plans to operate with a total payroll of 12,000 (8,000 office and engineering staff, 4,000 indirect personnel)
  
  
• The company will streamline the management structure by:
  • Reexamining the structure of managerial positions and posts
  • Promoting early retirement
  
  
• The company will reduce indirect labor costs.

(7) Reduction of assets

• Mitsubishi Motors will carefully examine its investment planning, and will keep capital spending under 50 billion yen on a non-consolidated basis and under 80 billion yen on a consolidated basis. (Capital spending in fiscal 1998: 45 billion yen non-consolidated, 72 billion yen consolidated.)
  
  
• The company will reduce its inventory assets in Japan and overseas by reducing production lead times.
  
  
• The company will float trade receivables.
  
  
• The company will sell off assets.

3. Other measures

(1) New technology

• Mitsubishi Motors will give priority to environmental and resource-conserving technologies in its allocation of management resources.
  
  
  • Development of technologies that evolve and raise the efficiency of the GDI engine:
    • Development of a GDI engine mated to a CVT and with an energy regeneration capability
    • Development of fuel consumption reducing technology, this to include reductions in body weight.
    
    
  • Development of fuel-cell powered vehicles in collaboration with Mitsubishi Heavy Industries, Ltd., which already makes fuel cells for power generating plants and leads the world with its advanced engineering and technological capabilities.

(2) Collaboration

• Mitsubishi Motors is currently examining a variety of collaborative ventures with a number of companies, these relating to the supply of the GDI engine, to production of the GDI engine under license and to mutual complementation of product lines.