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Mitsubishi Motors officially announces end of production in US; seeking buyer for plant

Mitsubishi Motors Corporation (MMC) officially announced, after several days of press reports, that Mitsubishi Motors North America, Inc., (MMNA) a wholly owned subsidiary of MMC in the United States, is preparing to end production of its sole production model—Outlander Sport—at its Bloomington-Normal, Illinois plant at the end of November 2015. Production of the model will be consolidated in Okazaki plant in Japan, pending a final decision by the MMC Board of Directors on 30 July.

MMNA said it will be making efforts to identify a buyer with the help from United Auto Workers (UAW).

Mitsubishi Motors’ production in the United States started in 1988 as Diamond Star Motors (DSM, later re-named as MMNA) which was a joint venture company with Chrysler Corporation.

DSM became a wholly owned subsidiary of MMC in 1991 after MMC bought all DSM shares owned by Chrysler Corporation.

In 2000 the production volume reached more than 222,000 units, but after that the plant faced very steep reduction in production units due to, among others, the end of OEM supply for Chrysler Corporation and the economic crisis. In 2009, the production volume bottomed as low as 18,500 units.

From 2012 and onward MMNA started production of Outlander Sport not only for North American market and but also for Russia, Middle East and Latin America markets, in order to secure production volume to gain production efficiency and improve utilization.

With the recovery of North American market, production volume increased to 70,000 units in 2013, however—low in terms of scale compared to other automobile assembly plants in North America. Production orders from Russia, which accounted for more than 30% of the total production volume, then significantly dropped since the second half of 2014, due to Russian economic crisis, which caused the production volume of MMNA plant to be even lower.

Taking the aforementioned situation into account, MMC decided to end production at Normal plant and consolidate the production Okazaki plant in Japan and Outlander Sport will be exported from Okazaki to North American as from next model year.

Earlier this month, MMNA reported its 16th consecutive month of year-over-year sales increases in the US in June, reporting 7,963 units sold—an increase of 32.3% from June 2014. Sales for the first half of the year were up 24.9% over the same period in 2014.

Outlander Sport is MMNA’s best selling vehicle in the US, posting 49544 units in the first half of 2015, up 25% from 39,672 for the same period in 2014.

Mitsubishi Motors said it would continue to make efforts to grow its brand value and increase its sales volume in the US market.


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