Mitsubishi to retreat from UK and European markets

Japanese car maker Mitsubishi has confirmed it has frozen the introduction of any new models to the European market as part of plans to retreat from the continent entirely, including pulling out of the UK.

On Monday, the vehicle manufacturer forecast its second straight year of losses as it suffered a plunge in sales due in part to the coronavirus pandemic. 

It said it will not only freeze new-generation models from Europe but will also cease developing cars – like the hugely popular Outlander PHEV – for European sales.

Mitsubishi’s current model line-up, also including ther Mirage supermini, ASX, Eclipse Cross and Shogun crossover and SUVs and the L200 pick-up, will remain on sale in Europe and the UK for as long as emissions regulations and residual stock levels will allow. 

Dealerships – which are operated by the Colt Car Company in the UK – will continue to offer after sales, parts and servicing to existing customers in Europe until the foreseeable future, the brand said.

Japan’s sixth biggest automaker made the announcement after it released a statement anticipating an operating loss of 140billion yen (£1.03billion) for the year ending March 2021. 

It will embark on a plan to shrink its workforce and production, and close unprofitable dealerships to cut 20 per cent of fixed costs in two years.

This would be Mitsubishi’s biggest loss in at least 18 years according to company financial records and the second dip into the red in consecutive years.

‘To pave the way to recovery, the top priority of all executives is to share a sense of crisis with employees to execute cost reductions,’ chief executive Takeo Kato told reporters this week.

The firm will now focus its resources on the South-East Asian market, where it currently has a 6.4 per cent market share, compared with just 1 per cent in Europe and 0.9 per cent in North America.  

Confirmation of a planned ‘freezing of the introduction of new products in Europe’ means upcoming models such as the next-generation L200 pick-up truck and Mirage supermini are unlikely to be sold in the UK.

That will also be the case for the popular, though ageing, Outlander PHEV. 

It has been among the best-selling alternative fuel vehicles in the UK since it went on sale in 2012.

In 2015, Prime Minster Boris Johnson – who was then Mayor of London – travelled to Tokyo to test the current Outlander PHEV as part of the Government’s push for drivers to switch to greener vehicles. 

A company statement said: ‘The forecast of costs to be incurred due to the freeze on introduction of new vehicle models has already been reflected in the earnings forecast for fiscal year 2020 that we announce today. 

‘The specific amount is currently being examined. We will make an announcement promptly if further related matters for disclosure arise.’

The shaky results come as Mitsubishi Motors’ alliance partners Nissan Motor Co. and Renault of France work to recover from the downfall of their former chairman, Carlos Ghosn.

Ghosn was out on bail, awaiting trial on various financial misconduct allegations in Tokyo, when he fled late last year to Lebanon. 

He has said he is innocent of the allegations of under-reporting future compensation and breach of trust.

Mitsubishi Motors has denounced Ghosn.