Two days after unveiling a full-scale restructuring of Mitsubishi Motors Corp, president Katsuhiko Kawasoe discussed the carmaker's problems and prospects with James B. Treece of Automotive News Europe.
Four years ago Mitsubishi wanted to replace Nissan as Japan's No. 2 carmaker. Now you say volume will not be your first priority. Why?
I have to shift gears according to the situation. On a tough road we need to shift down.
At present, we are in a very difficult financial situation. If the Asian economies recover and our business in the USA and Japan runs well, everything will be in full bloom.
At present we need huge amounts of money. Volume is important, but volume with profit is the priority.
Do you have enough capital to produce a new Carisma and Volvo S40 in 2002, as Volvo wants?
We need to invest in Europe and we need to make money in Europe to do it.
We have 1.9 percent of the market. It's not enough. We have invested in the Spacestar, but we need investment for a new Volvo, and a new car for ourselves. We have begun discussions with Volvo on sharing the same line, but this raises difficult questions. They have their own philosophy. They want to keep their image of Volvo as equated with safety. I hope we can resolve the difficulties by continuing the discussions with them.
In addition, the Dutch government wants to sell their stock to us. I have not made a decision on that.
Why can't you find other customers for the GDI (direct-injection gasoline engine)?
At first we thought people would rush to us if we opened up our technology. We showed it to five or six companies. The top people showed much greater interest than their engineering staff. The engineers' mentality is very interesting. They are proud of their capabilities. They would say, 'the technology is very interesting, but I believe I can develop it by myself.'
Are you considering closing a plant in Japan?
Our union, raised the same question. I told them I have no definite ideas on the subject. But our production capacity is much above the actual market requirements. So, it's up to the market.
What happens if your US operations are not profitable this year? Would you pull out of the US market?
No. In the past Mitsubishi Motor Sales of America was directed to sell as many cars as possible, regardless of profit. They just threw incentives at dealers to promote higher sales. Now I have agreed that sales can fall as long as operations stay profitable.