Mitsubishi To Launch All – New Six Models By 2020
The Japanese giant has revealed that it aims at growing its business by 30% year by year over a period of three years. It has announced that it not only anticipates growing its operating profit margin to 6.0% by the end of 2019, but will also work to achieve a sales increase of 1.3 million vehicles per annum.
The automaker's roadmap to the targeted objective is based on three main directives that will include: a program that will ensure Mitsubishi's product renewal, the automaker's focus on the core markets aimed at spearheading market expansion as well as improving on its operations to enhance efficiency.
According to Osamu Masuko, Mitsubishi's CEO, the new initiative to grow the company will play a key role towards rebuilding trust to Mitsubishi Motors, launch new vehicles and help the organization to achieve a V-shaped financial recovery.
Upon successful launch, the notable areas will act as foundations to the company's "future sustainable growth." Mr. Masuko reiterated that the laid out objectives will come to pass through an increase on capital expenditure and product spending.
The Launch of the six new models by 2020 is a plan that will lead to a 60% increase of annual capital expenditure, which translates to about $1.2 billion in fiscal 2019. According to the news release by Mitsubishi Motors, the targeted increase on annual capital expenditure will reduce spending proportion of sales to 5.5% per annum.
But R&D expenses are propagated to rise by 50% during this expansive period thus reflecting an investment growth of $5.3 billion. With such an envisioned challenge, Mitsubishi Motors has assured that it aims at maintaining a financial discipline that will help to generate positive free cash flow during the anticipated period.
Mitsubishi is also planning on establishing a dividend policy similar to what other successful Japanese automakers have put in place.
The company has also mentioned that its four-wheel drive SUVs and pick-ups are part of the plan. These models performance will be improved in order to draw a larger market interest. Other 11 models are also in the launch plan with the XPANDER and Eclipse Cross - adding to the list.
With the ASEAN region ranking high as Mitsubishi's core business center for four-wheel drive, the market expansion to this region has been emphasized. Other notable regions such as Oceania, United States, China and Japan are also holding ground to the same endeavor. The automaker is targeting up to 10% market share in ASEAN with reinforcement of sales and activities aimed at the US.
In China, Mitsubishi not only plans to strengthen the market, but will also introduce new models such as the Outlander and Eclipse Cross.
Japan market on the other hand will be the company's center for investment in sales network and product portfolio thus ensuring return on investment back to the country at the end of the plan.
With its reputation to produce on demand SUVs and pick-ups ranking high, the automaker will play a key role towards contributing its expertise in PHEV technology, strengthen its market position in the ASEAN region, and catapult the plan to the wider synergy program that is aimed at doubling annualized synergies to more than 10 billion euros by the end of 2022.
According to Mitsubishi Motors, the company is refreshing its product line-up, investing in R&D and targeting core market growth that will enable them to continue the transformation of the company over the next three years.
© 2017 Henry Kioko M