Forward thinking on Magna replacement
BY BRUCE NEWTON | 20th Aug 2004
MMAL president and CEO Tom Phillips gained an indication of support for the proposal from his new boss, Osamu Masuko, during the MMC head of overseas operations’ recent fact-finding mission to Australia.
But Mr Phillips conceded the pull forward for the Magna replacement would be no more than a couple of months to July 2005 from its scheduled launch in September 2005.
Such is the struggle the current Magna is going through, Mr Phillips admitted he would take any chance he could to get its replacement, codenamed PS41, to market sooner.
"I would love to go tomorrow," Mr Phillips told GoAuto.
Just 842 TL Magnas and 101 KL Veradas were sold in July, and for the year to date Magna is 5029 sales behind 2003.
Overall, Mitsubishi managed just 3538 sales to fall to seventh place in the rankings for the month, outsold by importers Nissan, Mazda and even a surging Honda.
For the year so far Mitsubishi is languishing in sixth place and is pretty much resigned to finishing there or fifth.
Despite the launch of a series of new models in recent times, it is the slow sales of the locally built Magna which is its core problem.
Hence the push to get the new car as early as possible.
The Magna replacement is based on the same platform as the Galant sold in the US and will be powered by a Japanese-built 3.8-litre MIVEC V6.
It will be built in right-hand drive only, not have an all-wheel drive option and not be called Magna.
Mitsubishi is spending $600 million on the development of the new car, which includes a $200 million investment in the Tonsley Park assembly plant featuring a new Spanish-built ‘AA’ class sheet metal stamping press that will enable 450 vehicle sets to be completed every two hours.
"Pulling the new car’s launch forward requires a lot of things to happen because some of the engine aspects are done in Japan and suppliers have a certain time schedule they have to work to," Mr Phillips said.
"It’s a matter of co-ordinating all that rather than just saying ‘I want to go early’.
"Every aspect of the program is designed to come out in September next year, so all the suppliers, all our own research and development, everything is programmed.
"But it has got some support in Japan. I wouldn’t like to predict how much further we can move it forward, but there is some intent to try and support us to bring it forward.
Mitsubishi was targeting 1500 Magna/Verada sales per month as it winds into a long run-out program
"You are not going to be talking months and months, you’re going to be talking maybe one or two months. It could come a little earlier." Mr Phillips said Mitsubishi was targeting 1500 Magna/Verada sales per month as it winds into a long run-out program, with well-specced TLs already pitched at $26,990 or $27,990 in some states.
"That’s somewhat in response to the fact that you can get $6000 off a Falcon, Camry is $29,000 driveaway and you’ve got Commodore run-outs," he said.
"The deals you come up against in the marketplace are really much more severe than what we have experienced. It’s frightening the amount of money they are throwing.
"So we have had to do that to keep our position." * During his Australian visit, Mr Masuko previewed to selected Mitsubishi dealers nine new models that will be launched in Australia by 2007. They included the Lancer Evo X, a MIVEC 2.4-litre Lancer, the Colt three-door and the replacements for the Outlander and Pajero SUVs.
Mitsubishi Australia optimisitc
MITSUBISHI Australia boss Tom Phillips has renewed confidence in the company’s long-term prospects as a manufacturer and R&D centre after Mitsubishi Motors Corporation’s new head of overseas operations visited Australia earlier this month.MMC board member Osamu Masuko attended a customer research clinic on next year’s all-new Magna replacement, met with key Mitsubishi dealers and toured the new $200 million production facilities at Adelaide’s Tonsley Park.
He made it clear that cost reductions and increased efficiencies were needed at Tonsley Park before a make-or-break second vehicle – which has both home market and substantial export potential – could be considered.
But Mr Phillips said he now had a greater sense of optimism about Mitsubishi Australia’s future as a manufacturer.
"What I’m hoping is that we can launch this car properly – with great quality, meeting our cost targets, having a very competitive price in the market – and then be able to got to Mr Masuko and say, ‘Well, this is what we’ve done – now give us this (chance with a second car)," Mr Phillips said.
"From my point of view, just walking around (Tonsley Park) with him today, it’s a totally different approach, quite frankly, to what we had there before.
"You talk about the R&D – we had almost hit a brick wall with R&D, and I’m not saying anything firm is going to happen, but suddenly you’ve got fresh eyes and an open mind. So who knows what can happen from that? "If there’s no business case, nothing’s going to happen – but that’s up to us. We’re not shying away from the brutal facts of reality – that we have a daily job to do and Magna’s going to be difficult. But I think new management has given us some hope that if we get it right, then anything can happen.
"We brought our most influential dealer group in, he fronted up to them and laid out all the problems – he heard all their concerns – lack of profitability, the things that we’ve done wrong – and he was very understanding." 2004.08.20_Mitsubishi_Factory&Truck_Graphic.jpg Mr Masuko said Australia remained an important part of MMC’s global strategy but the investment at Tonsley Park, which includes a $40 million stamping press (pictured), demanded a financial return.
"The new investment in Australia demands we need to achieve a return on this investment, even allowing for the cancellation of the second car which was to be manufactured here in 2007," he said.
"The downsizing and restructuring of our operations around the world and in Australia presents us with many challenges to overcome in the months ahead.
"MMAL has shown much capability in the past to tackle and overcome these challenges, and I am confident our team here will do so again." – TERRY MARTIN