Lifeline for Mitsubishi

MITSUBISHI Australia's future as a manufacturer beyond 2005 has been thrown a lifeline by a number of plans involving the manufacture of Chryslers for both domestic and export markets as early as 2003.

A facelifted 2003 Magna badged as a Chrysler is one of many opportunities Mitsubishi Australia could exploit to develop the export potential and production volumes its South Australian factories need to survive.

If the option is approved, a 2003 badge engineering exercise would be a precursor to Mitsubishi Australia's Adelaide plants becoming a centre for global right-hand drive production when the all-new Magna is built on a common platform with Chrysler from 2005.

But it's likely full-scale Chrysler production out of Adelaide won't begin until 2005, when the new Magna's platform - which will have four-wheel drive capability - could be shared with Chrysler to produce a number of possibilities, including two unique crossover vehicles.

Chrysler-Jeep Australia managing director Judith Wheeler said there were plans to produce Chryslers in Adelaide, but stressed the final decision has not been made and that a Chrysler-badged Magna in 2003 was likely to be premature.

"We have talked about some different projects, but I don't think you'll see something as early as 2003," she said.

"Definite plans have been approved for Chrysler only, which have to do with large cars in the future, but there are also other plans where Chrysler and Mitsubishi work on projects side by side starting from ground zero.

"The under part of the vehicle will be the same but the outside and interior will be totally different, but I think the earliest you'll see those products come to fruition will be 2005.

"We've done some of that before in the US and it's worked very well for us previously because you'd never know - they look like totally different vehicles."Ms Wheeler said any Chrysler/Mitsubishi venture would be produced for both domestic and export consumption, and that at least two new joint underpinnings were being considered.

"If we did do something, the understanding would be that we want to save the plant here in Australia and we want a project starting from the ground up. We want a product we can manufacture here in right-hand drive, sell it for both of us here, with exports in the future.

"There's other right-hand drive countries around the world that we can sell to but they (Adelaide) have the capabilities to produce in left-hand drive as well. So we'll probably have a different name then go into some of the other large left-drive markets as well, like the US.

"But I don' think you'e going to see 2003 for us. Obviously things can change but I don' think that at this time it makes sense. We've made some real inroads in our dealer network in the past year and the last thing I want to do is take a vehicle and call it a Chrysler when everyone would know it wouldn't be.

"(Mitsubishi Australia boss) Tom (Phillips), myself and the board of directors that we report to in Japan all agree that if we're going to do something it must be all new from the ground up, with a distinctive Mitsubishi version and a distinctive Chrysler version.

"We really haven't openly talked about future products yet, but there are a couple of different vehicles and a couple of different platforms we're looking at."Increased volume through exports is the key to the survival of Mitsubishi's manufacturing operations in Australia beyond 2005 and such possibilities for the factory to expand its production volumes have been given weight by senior Mitsubishi and DaimlerChrysler figures.

"What we've been looking at is the possibility of a Chrysler version of the 2003 Magna, and a shared platform from 2005," Daimler-Chrysler Australia/Pacific managing director Roman Fischer said.

"But you cannot simply put a Chrysler badge on a Mitsubishi - you have to make other changes. The new model in 2005 provides other opportunities. Volume is the key and by 2005 we will have a global platform strategy in place.

"An example of good economies of scale is South Africa, where every - some 40,000 - right-hand drive C-class comes from. It's the best example of what we can do, what we should do.

"But DaimlerChrysler is only a shareholder in Mitsubishi, so we don't make the decisions.

"The board of Chrysler and Mitsubishi Tokyo has to be convinced, but we'll do what ever we can to help."Mr Fischer's comments were supported by Mitsubishi Motors chief operating officer Rolf Eckrodt and executive general manager international car operations Steven Torok in Tokyo.

"Of course we will try to help: if Australia is to survive, then we have to create some export potential - that's what we're checking now," said Mr Eckrodt.

Asked if Adelaide could produce Chrys-lers, Mr Torok said: "We don't have any plans but in the context of a global Mitsu-bishi-DaimlerChrysler alliance it's certainly possible. We believe that it's difficult to sustain economies of scale in the Aus-tralian market alone so as part of an integrated manufacturing process, both globally and in partnership with Daimler-Chrys-ler, we'll be looking for something that has export, as well as domestic, potential".

Asked about specific export possibilities in the wake of continuing rumours that Australia could become a global right-hand drive supply centre if Magna Verada/ Diamante production ceased in Japan, where such large cars attract increasingly small volumes, Mr Torok, a member of the MMC board, said: "There are many alternatives, but I wouldn't limit the alternatives just to Diamante.

"We'd like to have a global production strategy so we can avoid a situation where major plants build only one product for only one market."He said any right-hand drive market was a potential client for Mitsubishi Australia.

"There's an established relationship with the US and a growing export business in the Middle East. The strategy of the company is to develop global platforms, so any of the global right-hand markets could be potential customers," he said.

"We're going to invest something like $70 million in a pretty complete redesign of the car (in 2003) and in the meantime we're investigating long-term technologies and strategies for Australia, but we haven't made a decision yet."It is believed production plans under consideration for Mitsubishi Australia include everything from a Chrysler-badged Magna/Verada for export to regions likes Canada and the Middle East, to individually bodied versions of the same soft-roader 4WD for both Chrysler and Mitsubishi, a niche vehicle with left and right-hand drive potential.

Chrysler will release an all-new Outback-style off-roader in 2003, new versions of which could eventually be built here on Mitsubishi's new global platform.

A similar arrangement, which could see Mitsubishi's new Mirage based on the same underpinnings as Chrysler's next Neon and a new Smart micro car, is further evidence of co-operation between Mitsubishi Motors and DaimlerChrysler, which holds a controlling interest in the struggling Japanese car-maker.