Japanese automaker has decided to stop production in its U.S. based manufacturing plant. Located in Normal, Illinois; the plant had an output of 200,000 in 2002 but now that number has dropped to 64,000 and total sales of all Mitsubishi cars whether imported or assembled stands at 82,000. These numbers have forced the company to shut down the plant even though it was profitable in the last quarter.
The profit was because of the surging sales of SUVs in the country but Mitsubishi feels that it did not have enough of the pie. The company has informed its 1,200 odd workforce that November 30, will be the last operative day for the plant under Mitsubishi. It has invited other manufacturers who are interested in buying the plant and also assured them of a quality workforce in the form of soon to be ex-employees.
Company officials have cited incapability of the plant to produce a larger number of vehicles as the reason why it is being shut down. The company will continue its sales in U.S. though, through imports. It plans to strengthen its operations in Asia and has recently opened a new plant in Thailand. Import may be a more profitable business for the manufacturer as Yen is currently very weak against dollar and the cost of building the same cars in Japan is comparatively less.
Indonesia, Thailand and Philippines are strong markets for the company and it has a good brand image there. The company is planning to strengthen its position in these countries and then concentrate on the American market. Investors have approved their move as the stock went up by 5% on Monday. The investors surely do not want the company to suffer the same fate as Suzuki which had to stop sales of all its cars in the country at the end of 2012 due to poor sales and rising debts.
