Mitsubishi Motors is sometimes the forgotten partner in the three-way alliance with Nissan and Renault that dominates the global auto industry, but the Tokyo-based firm has a colorful — and scandal-hit — history.
At an emergency board meeting Monday, executives from the firm ousted Carlos Ghosn as chairman following the tycoon’s shocking arrest a week ago on allegations of financial misconduct.
Here are some facts and background about Mitsubishi Motors, which employs around 31,000 people and whose products are sold in 160 countries.
Scandal follows scandal
Founded in 1970, the Tokyo-based firm has found itself on the brink of the scrap yard following massive corporate scandals.
In 2000, Mitsubishi Motors was forced to confess it had failed to inform authorities about at least 64,000 customer complaints over faulty vehicles since 1977, opting to repair the vehicles itself instead of issuing costly model-wide recalls.
Four years later, the scandal broadened as it emerged the firm also covered up faults on 160,000 passenger cars and failed to declare a full recall.
The scandals had a major impact on Mitsubishi’s domestic car sales and stock price, as trust in the firm was shattered.
Then, in 2016, another scandal broke: The firm had been cheating on fuel-efficiency tests on cars for its home market for the past 25 years to make them appear more “green.” This scandal affected hundreds of thousands of cars.
The series of scandals had a catastrophic effect on sales and share prices, and Mitsubishi Motors was twice hauled from the verge of bankruptcy.
In 2004, the firm was saved by the wider Mitsubishi group, including Mitsubishi Heavy Industries Ltd., one of Japan’s biggest industrial conglomerates.
After an initial cash injection of ¥496 billion, three companies (Mitsubishi Heavy Industries, Mitsubishi Corp. and Bank of Tokyo-Mitsubishi) plowed in a further ¥270 billion to keep the car firm afloat.
This gave the combined holding 34 percent of Mitsubishi Motors stock.
After the fuel-mileage scandal, who should ride to the rescue but Ghosn.
Working with Nissan, the savvy businessman known as the “Cost-cutter” snapped up a 34 percent stake in Mitsubishi Motors at a cost of ¥237 billion and became chairman of the firm.
Rather like Nissan, also saved by Ghosn from serious financial trouble, Mitsubishi Motor’s fortunes were revived after joining the Nissan-Renault alliance.
In its most recent financial statement, released earlier this month, Mitsubishi Motor announced a gain of 7 percent in first-half net profits compared with the same period the previous year. Operating profit jumped nearly 29 percent.
The recovery was led by a strong performance in Asia. It doubled sales in Indonesia and also sold well in Thailand and China.
Importantly, it also saw sales rebounding in the home market, suggesting the firm was beginning to rebuild consumers’ trust after the scandals.
According to sales figures released earlier this month, Nissan was the best-selling firm in the alliance, selling 5.81 million cars worldwide last calendar year. Renault sold 3.76 million and Mitsubishi Motors 1.03 million.
For fiscal year 2019, which ends March 31, Mitsubishi Motors aims to sell 1.25 million cars to produce a turnover of ¥2.4 trillion.
It projects a net profit over the fiscal year of ¥110 billion, a gain of 2.2 percent.