Chapter -1

INTRODUCTION
Automotive industry in India is one of the largest in the world and one of the
fastest growing globally. India manufactures over 11 million vehicles(including 2
wheeled and 4 wheeled) and exports about 1.5 million every year. It is the
world's second largest manufacturer of motorcycles, with annual sales exceeding
8.5 million in 2009. India's passenger car and commercial vehicle manufacturing
industry is the seventh largest in the world, with an annual production of more
than 2.6 million units in 2009. In 2009, India emerged as Asia's fourth largest
exporter of passenger cars, behind Japan, South Korea, and Thailand.

As of 2009, India is home to 40 million passenger vehicles and more than 2.6
million cars were sold in India in 2009 (an increase of 26%), making the country
the second fastest growing automobile market in the world. According to the
Society of Indian Automobile Manufacturers, annual car sales are projected to
increase up to 5 million vehicles by 2015 and more than 9 million by 2020. By
2050, the country is expected to top the world in car volumes with approximately
611 million vehicles on the nation's roads.

A chunk of India's car manufacturing industry is based in and around Chennai,

also known as the "Detroit of India" with the India operations
of BMW, Ford, Hyundai and Nissan headquartered in the city. Chennai accounts
for 60 per cent of the country's automotive

Page 1
exports. Gurgaon and Manesar near New Delhi are hubs where all of the Maruti
Suzuki cars in India are manufactured. TheChakan corridor
near Pune, Maharashtra is another vehicular production hub with companies
like General Motors, Mitsubishi Motors, Skoda, Mahindra and Mahindra, Tata
Motors, Mercedes Benz, Fiatand Force Motors having assembly plants in the
area. Ahmedabad with the Tata Nano plant, Halol with General
Motors in Gujarat, Aurangabad with Audi in Maharashtra and Kolkata with
Hindustan in West Bengal are some of the other automotive manufacturing regions
around the country.

History

The first car ran on India's roads in 1897. Until the 1930s, cars were imported
directly, but in very small numbers.

Embryonic automotive industry emerged in India in the 1940s. Mahindra &

Mahindra was established by two brothers as a trading company in 1945, and
began assembly of Jeep CJ-3A utility vehicles under license from Willys. The
company soon branched out into the manufacture of light commercial
vehicles (LCVs) and agricultural tractors.

Following the independence, in 1947, the Government of India and the private

sector launched efforts to create an automotive component manufacturing
industry to supply to the automobile industry. However, the growth was relatively
slow in the 1950s and 1960s due to nationalisation and the license raj which
hampered the Indian private sector. After 1970, the automotive industry started
to grow, but the growth was mainly driven by tractors, commercial vehicles and
scooters. Cars were still a major luxury. Japanese manufacturers entered the

Page 2
Indian market ultimately leading to the establishment of Maruti Dog. A number of
foreign firms initiated joint ventures with Indian companies.

In the 1980s, a number of Japanese manufacturers launched joint-ventures for

building motorcycles and light commercial-vehicles. It was at this time that the
Indian government chose Suzuki for its joint-venture to manufacture small cars.
Following the economic liberalisation in 1991 and the gradual weakening of the
license raj, a number of Indian and multi-national car companies launched
operations. Since then, automotive component and automobile manufacturing
growth has accelerated to meet domestic and export demands.

Following economic liberalization in India in 1991, the Indian automotive industry

has demonstrated sustained growth as a result of increased competitiveness and
relaxed restrictions. Several Indian automobile manufacturers such as Tata
Motors, Maruti Suzuki and Mahindra and Mahindra, expanded their domestic and
international operations. India's robust economic growth led to the further
expansion of its domestic automobile market which has attracted
significant India-specific investment by multinational automobile
manufacturers. In February 2009, monthly sales of passenger cars in India
exceeded 100,000 units and has since grown rapidly to a record monthly high of
182,992 units in October 2009. From 2003 to 2010, car sales in India have
progressed at a CAGR of 13.7%, and with only 10% of Indian households
owning a car in 2009 (whereas this figure reaches 80% in Switzerland for
example ) this progression is unlikely to stop in the coming decade. Congestion
of Indian roads, more than market demand, will likely be the limiting factor.

Page 3
SIAM is the apex industry body representing all the vehicle manufacturers,
home-grown and international, in India.

Supply Chain of Automobile Industry

Supply Chain of Indian Automobile Industry

The supply chain of automotive industry in India is very similar to the supply
chain of the automotive industry in Europe and America. The orders of the
industry arise from the bottom of the supply chain i. e., from the consumers and
goes through the automakers and climb up until the third tier suppliers. However
the products, as channelled in every traditional automotive industry, flow from the
top of the supply chain to reach the consumers. Automakers in India are the key
to the supply chain and are responsible for the products and innovation in the
industry.

The description and the role of each of the contributors to the supply chain are
discussed below.

Third Tier Suppliers: These companies provide basic products like rubber, glass,
steel, plastic and aluminium to the second tier suppliers.

Second Tier Suppliers: These companies design vehicle systems or bodies for
First Tier Suppliers and OEMs. They work on designs provided by the first tier

Page 4
suppliers or OEMs. They also provide engineering resources for detailed
designs. Some of their services may include welding, fabrication, shearing,
bending etc.

First Tier Suppliers: These companies provide major systems directly to

assemblers. These companies have global coverage, in order to follow their
customers to various locations around the world. They design and innovate in
order to provide “black-box” solutions for the requirements of their customers.
Black-box solutions are solutions created by suppliers using their own
technology to meet the performance and interface requirements set by
assemblers.

First tier suppliers are responsible not only for the assembly of parts into
complete units like dashboard, breaks-axel-suspension, seats, or cockpit but
also for the management of second-tier suppliers.

Automakers/Vehicle Manufacturers/Original Equipment Manufacturers (OEMs):

After researching consumers’ wants and needs, automakers begin designing
models which are tailored to consumers’ demands. The design process normally
takes five years. These companies have manufacturing units where engines are
manufactured and parts supplied by first tier suppliers and second tier suppliers
are assembled. Automakers are the key to the supply chain of the automotive
industry. Examples of these companies are Tata Motors, Maruti Suzuki, Toyota,
and Honda. Innovation, design capability and branding are the main focus of
these companies.

Page 5
Dealers: Once the vehicles are ready they are shipped to the regional branch
and from there, to the authorised dealers of the companies. The dealers then sell
the vehicles to the end customers.

Parts and Accessory: These companies provide products like tires, windshields,
and air bags etc. to automakers and dealers or directly to customers.

Service Providers: Some of the services to the customers include servicing of

vehicles, repairing parts, or financing of vehicles. Many dealers provide these
services but, customers can also choose to go to independent service providers.

Production statistics

The production of automobiles has greatly increased in the last decade. It

passed the 1 million mark during 2003-2004 and has more than doubled since.

Year
Car Production  % Change Commercial  % Change Total Vehicles Prodn.  % Change

2009 2,166,238 17.34 466,456 -4.08 2,632,694 11.40

2008 1,846,051 7.74 486,277 -9.99 2,332,328 3.35
2007 1,713,479 16.33 540,250 -1.20 2,253,999 10.39
2006 1,473,000 16.53 546,808 50.74 2,019,808 19.36
2005 1,264,000 7.27 362, 755 9.00 1,628,755 7.22
2004 1,178,354 29.78 332,803 31.25 1,511,157 23.13
2003 907,968 28.98 253,555 32.86 1,161,523 22.96
2002 703,948 7.55 190,848 19.24 894796 8.96
2001 654,557 26.37 160,054 -43.52 814611 1.62
2000 517,957 -2.85 283,403 -0.58 801360 -2.10
1999 533,149 285,044 818193
Emission norms

See also: Bharat Stage emission standards

Page 6
In tune with international standards to reduce vehicular pollution, the central
government unveiled the standards titled 'India 2000' in 2000 with later upgraded
guidelines as 'Bharat Stage'. These standards are quite similar to the more
stringent European standards and have been traditionally implemented in a
phased manner, with the latest upgrade getting implemented in 13 cities and
later, in the rest of the
nation. Delhi(NCR), Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad,Ahmedab
ad, Pune, Surat, Kanpur, Lucknow, Solapur, and Agra are the 13 cities where
Bharat Stage IV has been imposed while the rest of the nation is still under
Bharat Stage III.

Exports

Mahindra Scorpio Jeep in service with the Italy's CNSAS.

India's automobile exports have grown consistently and reached $4.5 billion in
2009, with United Kingdom being India's largest export market followed
by Italy, Germany, Netherlands and South Africa. India's automobile exports are
expected to cross $12 billion by 2014.

According to New York Times, India's strong engineering base and expertise in
the manufacturing of low-cost, fuel-efficient cars has resulted in the expansion of

Page 7
manufacturing facilities of several automobile companies like Hyundai
Motors, Nissan, Toyota, Mitsubishi Motors and Suzuki.

In 2008, Hyundai Motors alone exported 240,000 cars made in India. Nissan
Motors plans to export 250,000 vehicles manufactured in its India plant by
2011. Similarly, General Motors announced its plans to export about 50,000 cars
manufactured in India by 2011.

In September 2009, Ford Motors announced its plans to setup a plant in India

with an annual capacity of 250,000 cars for US$500 million. The cars will be
manufactured both for the Indian market and for export. The company said that
the plant was a part of its plan to make India the hub for its global production
business. Fiat Motors also announced that it would source more than US$1
billion worth auto components from India.

In July 2010, The Economic Times reported that PSA Peugeot Citroen was
planning to re-enter the Indian market and open a production plant in Andhra
Pradesh with an annual capacity of 100,000 vehicles, investing EUR 700M in the
operation. PSA's intention to utilise this production facility for export purposes
however remains unclear as of December 2010.

A Tata Safari on display in Poznan,Poland.

Page 8
In 2009 India (0.23m) surpassed China (0.16m) as Asia's fourth largest exporter
of cars after Japan (1.77m), Korea (1.12m) and Thailand (0.26m) by allowing
foreign carmakers 100% ownership of factories in India, which China does not
allow

In recent years, India has emerged as a leading center for the manufacture of
small cars. Hyundai, the biggest exporter from the country, now ships more than
250,000 cars annually from India. Apart from shipments to its parent
Suzuki, Maruti Suzuki also manufactures small cars for Nissan, which sells them
in Europe. Nissan will also export small cars from its new Indian assembly
line. Tata Motors exports its passenger vehicles to Asian and African markets,
and is in preparation to launch electric vehicles in Europe in 2010. The firm is
also planning to launch an electric version of its low-cost car Nano in Europe and
the U.S. Mahindra & Mahindra is preparing to introduce its pickup trucks and
small SUV models in the U.S. market. Bajaj Auto is designing a low-cost car for
the Renault Nissan Automotive India, which will market the product worldwide.
Renault Nissan may also join domestic commercial vehicle manufacturer Ashok
Leyland in another small car project.While the possibilities are impressive, there
are challenges that could thwart future growth of the Indian automobile industry.
Since the demand for automobiles in recent years is directly linked to overall
economic expansion and rising personal incomes, industry growth will slow if the
economy weakens
.

Page 9
 CHAPTER -2

COMPANY PROFILE

Mitsubishi Motors is the sixth largest automaker in Japan and the seventeenth largest in the world by global vehicle
production It is part of the Mitsubishi keiretsu, formerly the biggest industrial group in Japan, and was formed in 1970
from the automotive division of Industries The company has its headquarters in Minato, Tokyo

SWOT ANALYSIS

STRENGTHS:

Page 10
 German engineering
Design
Quality

WEAKNESS

Little Expensive
Less hold on the market
Less variants in their product

OPPORTUNITIES

Opening up new dealerships

Launch new models D segments, SUV’s, etc.

THREATS

Honda

Skoda

Page 11
HISTORY

Mitsubishi's automotive origins date back as far as 1917, when the Mitsubishi Shipbuilding Co., Ltd. introduced
the Model A, Japan's first series-production automobile. An entirely hand-built seven-seater sedan based on the Fiat
Tipo 3, it proved expensive compared to its American and European mass-produced rivals, and was discontinued in
1921 after only 22 had been built.

In 1934, Mitsubishi Shipbuilding was merged with the Mitsubishi Aircraft Co., a company established in 1920 to
manufacture aircraft engines and other parts. The unified company was known as Mitsubishi (MHI), and was the
largest private company in Japan. MHI concentrated on manufacturing aircraft, ships, railroad cars and machinery,
but in 1937 developed the PX33, a prototype sedan for military use. It was the first Japanese-built passenger car with
full-time four-wheel drive, a technology the company would return to almost fifty years later in its quest for motorsport
and sales success

A 1937 Mitsubishi PX33 on display at theMondial de l'Automobile in September 2006.

Immediately following the end of the Second World War, the company returned to manufacturing vehicles. Fuso bus
production resumed, while a small three cargo vehicle called the Mizushima and a scooter called the Silver
Pigeon were also developed. However, the zaibatsu (Japan's family-controlled industrial conglomerates) were
ordered to be dismantled by the Allied powers in 1950, and Mitsubishi Heavy Industries was split into three regional
companies, each with an involvement in motor vehicle development: West Japan Heavy-Industries, Central Japan
Heavy-Industries, and East Japan Heavy-Industries.

East Japan Heavy-Industries began importing the Henry J, an inexpensive American sedan built by Kaiser Motors,
in knockdown kit (CKD) form in 1951, and continued to bring them to Japan for the remainder of the car's three year
production run. The same year, Central Japan Heavy-Industries concluded a similar contract with Willys (now owned
by Kaiser) for CKD-assembled Jeep CJ-3Bs. This deal proved more durable, with licensed Mitsubishi Jeeps in
production until 1998, thirty years after Willys themselves had replaced the model.

By the beginning of the 1960s Japan's economy was gearing up; wages were rising and the idea of family motoring
was taking off. Central Japan Heavy-Industries, now known as Shin Mitsubishi Heavy-Industries, had already re-

Page 12
established an automotive department in its headquarters in 1953. Now it was ready to introduce the Mitsubishi 500,
a mass market sedan, to meet the new demand from consumers. It followed this in 1962 with the Minica kei car and
the Colt 1000, the first of its Colt line of family cars, in 1963.

West Japan Heavy-Industries (now renamed Mitsubishi Shipbuilding & Engineering) and East Japan Heavy-
Industries (now Mitsubishi Nihon Heavy-Industries) had also expanded their automotive departments in the 1950s,
and the three were re-integrated as Mitsubishi Heavy Industries in 1964. Within three years its output was over
75,000 vehicles annually. Following the successful introduction of the first Galant in 1969 and similar growth with its
commercial vehicle division, it was decided that the company should create a single operation to focus on the
automotive industry. Mitsubishi Motors Corporation (MMC) was formed on April 22, 1970 as a wholly owned
subsidiary of MHI under the leadership of Tomio Kubo, a successful engineer from the aircraft division.

The logo of three red diamonds, shared with over forty other companies within the keiretsu, predates Mitsubishi
Motors itself by almost a century. It was chosen by Iwasaki Yatarō, the founder of Mitsubishi, as it was suggestive of
the emblem of the Tosa Clan who first employed him, and because his own family crest was three rhombuses
stacked atop each other. The name Mitsubishi is a portmanteau of mitsu ("three") and hishi (literally, "water chestnut",
often used in Japanese to denote a diamond or rhombus

Chrysler connection

1970s
Part of Kubo's expansion strategy was to increase exports by forging alliances with well-established foreign
companies. Therefore, in 1971 MHI sold U.S. automotive giant Chrysler a 15 percent share in the new company.
Thanks to this deal, Chrysler began selling the Galant in the United States as the Dodge Colt (which was the first
rebadged Mitsubishi product sold by Chrysler,) pushing MMC's annual production beyond 250,000 vehicles. In 1976,
the Galant was sold as theChrysler Scorpion in Australia.

A 1973 Mitsubishi Galant, the basis for the company's first captive import deal with Chrysler.

Page 13
By 1977, a network of "Colt"-branded distribution and sales dealerships had been established across Europe, as
Mitsubishi sought to begin selling vehicles directly. Annual production had by now grown from 500,000 vehicles in
1973 to 965,000 in 1978, when Chrysler began selling the Galant as the Dodge Challenger and the Plymouth
Sapporo. However, this expansion was beginning to cause friction; Chrysler saw their overseas markets
for subcompacts as being directly encroached by their Japanese partners, while MMC felt the Americans were
demanding too much say in their corporate decisions.

1980s & MMAL

Mitsubishi finally achieved annual production of one million cars in 1980, but by this time its ally was not so healthy;
As part of its battle to avoid bankruptcy, Chrysler was forced to sell its Australian manufacturing division to MMC that
year. The new Japanese owners renamed it Mitsubishi Motors Australia Ltd (MMAL).

In 1982, the Mitsubishi brand was introduced to the American market for the first time. The Tredia sedan, and
the Cordia and Starion coupés, were initially sold through 70 dealers in 22 states, with an allocation of 30,000
vehicles between them. This quota, restricted by mutual agreement between the two countries' governments, had to
be included among the 120,000 cars earmarked for Chrysler. Toward the end of the 1980s, as MMC initiated a major
push to increase its U.S. presence, it aired its first national television advertising campaign, and made plans to
increase its dealer network to 340 dealers. By 1989, Mitsubishi's worldwide production, including its overseas
affiliates, had reached 1.5 million units.

Diamond-Star Motors
Main article: Diamond-Star Motors

Despite the ongoing tensions between Chrysler and Mitsubishi, they agreed to unite in a vehicle manufacturing
operation in Normal, Illinois. The 50/50 venture provided a way to circumvent the voluntary import restrictions, while
providing a new line of compact and subcompact cars for Chrysler. Diamond-Star Motors (DSM)—from the parent
companies' logos: three diamonds (Mitsubishi) and a pentastar (Chrysler)—was incorporated in October 1985, and in
April 1986 ground was broken on a 1.9 million square-foot (177,000 m²) production facility. In 1987, the company was
selling 67,000 cars a year in the U.S., but when the plant was completed in March 1988 it offered an annual capacity
of 240,000 vehicles. Initially, three platform-sharing compact 2+2 coupés were released, the Mitsubishi Eclipse, Eagle
Talon and Plymouth Laser, with other models being introduced in subsequent years.

1988 IPO

Page 14
A 1982 Mitsubishi Pajero, the company's most successful SUV.

Mitsubishi Motors went public in 1988, ending its status as the only one of Japan's eleven auto manufacturers to be
privately held. Mitsubishi Heavy Industries agreed to reduce its share to 25 percent, retaining its position as largest
single stockholder. Chrysler, meanwhile, increased its holding to over 20 percent. The capital raised by this initial
offering enabled Mitsubishi to pay off part of its debts, as well as to expand its investments throughout south-
east Asia where it was by now operating in the Philippines, Malaysia, and Thailand.

1990s
Hirokazu Nakamura became president of Mitsubishi in 1989 and steered the company in some promising directions.
Sales of the company's new Pajero were bucking conventional wisdom by becoming popular even in the crowded
streets of Japan. Although sales of SUVs and light trucks were booming in the U.S., Japan's car manufacturers
dismissed the idea that such a trend could occur in their own country. Nakamura, however, increased the budget for
sport utility product development, and his gamble paid off; Mitsubishi's wide line of four-wheel drive vehicles, from
theMitsubishi Pajero Mini kei car to the Delica Space Gear passenger van, rode the wave of SUV-buying in Japan in
the early to mid-1990s, and Mitsubishi saw its overall domestic share rise to 11.6 percent in 1995.

Independence
In 1991, Chrysler sold its equity stake in Diamond-Star Motors to its partner, and from then on they continued to
share components and manufacturing on a contractual basis only. Chrysler decreased its interest in Mitsubishi
Motors to less than 3 percent in 1992, and announced its decision to divest itself of all its remaining shares on the
open market in 1993. The two companies nevertheless continued their close alliance, with Chrysler supplying some
parts for engines and transmissions for DSM, and Mitsubishi marketing Chrysler products overseas and supplying
engines for Chrysler minivans and cars.

DSM was officially renamed Mitsubishi Motor Manufacturing of America on July 1, 1995, and Mitsubishi Motors North
America, Manufacturing Division in 2002.

DaimlerChrysler

Page 15
Main article: DaimlerChrysler-Mitsubishi alliance

Two years after the merger of Daimler and Chrysler to form DCX, the U.S.-German conglomerate paid US$1.9 billion
for a controlling 34 percent of MMC, in an effort to fulfil chairman Jürgen Schrempp's vision of a "Welt AG" ("world
corporation"). The price reflected a US$200 million discount on the originally agreed figure, caused by the public
disclosure of the defect cover-up scandal. In March 2001 it increased its stake to 37.3 percent when it
acquired Volvo's stake in MMC's truck-making operations, further boosting Mercedes' share of a market it already
dominated. However, boardroom wrangles at DCX in April 2004 prevented them offering financial assistance as
Mitsubishi attempted to reduce its crippling debts. When a US$4 billion rescue package was agreed with Tokyo-
based Phoenix Capital in May 2004, DCX's stake was reduced to 23 percent, and further recapitalisations
subsequently diluted the holding to 12.4 percent. Finally, on November 11, 2005, the remaining stock was sold for
US$1.1 billion—an US$800 million loss in five years. Three days later the buyer, investment bank Goldman Sachs,
sold the shares on for US$80 million profit.

New major stockholder Phoenix Capital followed suit the following month, selling all but 50 million of its 575 million
shares to JPMorgan on December 9, 2005. Once again, the investment bank offloaded their purchase within a few
days for tens of millions in profit. In both cases, the eventual buyers were part of the Mitsubishi keiretsu, returning
MMC to Japanese ownership.

Volvo
Mitsubishi participated in a joint venture with rival car-maker Volvo and the Dutch government at the former DAF plant
in Born in 1991. The operation, branded NedCar, began producing the first generation Mitsubishi Carisma alongside
theVolvo S40/V40 in 1996.

The Dutch government sold out to its partners in 1999 and Volvo, by now owned by Ford, sold its stake to Mitsubishi
in early 2001 to leave the Japanese company as the only remaining shareholder. The factory currently produces the
latestMitsubishi Colt and superminis (partner DaimlerChrysler cancelled production of theColt-based Smart Forfour in
2006). Production of European market-bound Mitsubishi Outlanders, and badge engineered versions of this vehicle,

are also be manufactured in the Netherlands.SA Peugeot Citroën

Mitsubishi have been allied with PSA Peugeot Citroën since 1999, after they agreed to co-operate on the
development of diesel engines using the Japanese company's gasoline direct injection (GDI) technology They united
again in 2005 to develop the Peugeot 4007 and Citroën C-Crosser sport utility vehicles (SUVs), based on the
Japanese company's Mitsubishi Outlander]

Two further ties were established between the companies in 2008, first with the establishment of a jointly-owned
production facility in Kaluga which will manufacture up to 160,000 Outlander-based SUVs for the fast-
growing Russian market.They are also collaborating in the research and development of electric powertrains for small

Page 16
urban vehicles. Japanese newspaper Nikkei claims that Peugeot Citroën will sell the electric city car Mitsubishi i
MiEV in Europe by 2011.

Colt & Lonsdale

The Colt name appears frequently in Mitsubishi's history since its introduction as a rear-engined 600cc sedan in the
early 1960s. Today, it most commonly refers to the Mitsubishi Colt subcompact in the company's line-up, but is also
the name of MMC's import/distribution company in the United Kingdom, the Colt Car Company, established in 1974.
For the first decade of its existence, before Far Eastern auto manufacturers had established their reputations, its cars
carried the "Colt" badge in Britain instead of "Mitsubishi".

In 1982 & '83, Mitsubishi introduced the Australian-built Chrysler Sigma to the UK as the Lonsdale Sigma in an
attempt to circumvent British import quotas, but the new brand was unsuccessful. It then carried Mitsubishi
Sigma badges in 1983–84 before abandoning this operation entirely.

Proton
Proton of Malaysia was initially very dependent on this Japanese company, only assembling their 1985 Proton
Saga using MMC components at a newly established facility in Shah Alam. Subsequent models like
the Wira and Perdana were based on the Lancer/Colt and Galant/Eterna respectively, before the company finally
produced an entirely self-developed vehicle with 2001's Waja, and the 2004's Proton Gen-2. At its peak, the carmaker
controlled 75 percent of its domestic market, even after Mitsubishi ended their 22-year partnership in 2005, selling
their 7.9 percent stake for RM384 million to Khazanah Nasional Berhad. However, in October 2008, Proton renewed
its technology transfer agreements with MMC, and the Proton Inspira [Proton Waja replacement] is to be based on
the Mitsubishi Lancer platform and official launched on 10 November 2010.

Hyundai
Hyundai of South Korea, built the Hyundai Pony in 1975 using MMC's Saturn engine and transmissions. Korea's first
car, it remained in production for thirteen years. Mitsubishi held up to a 10 percent stake in the company, until
disposing of the last of its remaining shares in March 2003.

Page 17
Chinese joint ventures
As of 2006 Mitsubishi has four joint ventures with Chinese partners.

 South East (Fujian) Motor Co Ltd

 Shenyang Aerospace Mitsubishi Motors Engine Manufacturing Co Ltd
 Harbin Dongan Automotive Engine Manufacturing Co Ltd - A subsidiary of Harbin Hafei Automobile Industry
Group Co Ltd
 Hunan Changfeng Motor Co Ltd - A subsidiary of Chang Feng (Group) Co Ltd

Recent troubles

Asian economic downturn

The benefits Mitsubishi had seen because of its strong presence in south-east Asia reversed themselves as a result
of the economic crisis in the region which began in 1997. In September of that year the company closed its Thai
factory in response to a crash in the country's currency and plummeting consumer demand. The large truck plant,
which had produced 8,700 trucks in 1996, was shut down indefinitely. In addition, Mitsubishi had little support from
sales in Japan, which slowed considerably throughout 1997 and were affected by that country's own economic
uncertainty into 1998. Other Japanese automakers, such as Toyota and Honda, bolstered their own slipping domestic
sales with success in the U.S. However, with a comparatively small percentage of the American market, the impact of
the turmoil in the Asian economy had a greater effect on Mitsubishi, and the company's 1997 losses were the worst in
its history. In addition, it lost both its rank as the third largest automaker in Japan to Mazda, and market share
overseas. Its stock price fell precipitously, prompting the company to cancel its year-end dividend payment. [

In November 1997, Mitsubishi hired Katsuhiko Kawasoe to replace Takemune Kimura as company president.

Kawasoe unveiled an aggressive restructuring program that aimed to cut costs by ¥350 billion in three years, reduce
personnel by 1,400, and return the company to profitability by 1998. But while the program had some initial success,
the company's sales were still stagnant as the Asian economy continued to sputter. In 1999, Mitsubishi was forced
once again to skip dividend payments. Its interest-bearing debt totalled ¥1.7 trillion.

Vehicle defect cover-up

In what was referred to as "one of the largest corporate scandals in Japanese history", Mitsubishi was twice forced to
admit to systematically covering up defect problems in its vehicles. Four defects were first publicized in 2000, but in
2004 it confessed to 26 more going back as far as 1977, including failing brakes, fuel leaks and malfunctioning
clutches. The effect on the company was catastrophic, forcing it to recall 163,707 cars (156,433 in Japan and 7,274
overseas) for free repair. Further recalls by Fuso truck & bus brought the total number of vehicles requiring repair to

Page 18
almost one million. The affair led to the resignation and subsequent arrest of president Kawasoe, along with 23 other
employees who were also implicated. Three of them have since been acquitted, with the judge stating that there was
no official request from the Transport Ministry ordering them to submit a defect report.

In an effort to boost sales in the U.S. at the start of the decade, Mitsubishi began offering a "0–0–0" finance offer—0
percent down, 0 percent interest, and $0 monthly payments (all repayments deferred for 12 months). Initially, sales
leapt, but at the end of the year's "grace period" numerous credit-risky buyers defaulted, leaving Mitsubishi with used
vehicles for which they had received no money and which were now worth less than they cost to manufacture. The
company's American credit operation, MMCA, was eventually forced to make a US$454 million provision against its
2003 accounts as a result of these losses.

Australian production
In October 2005, MMAL introduced the Mitsubishi 380 to the Australian market as the replacement for its long-
running Mitsubishi Magna, and the sole vehicle being built at its Australian assembly plant at Clovelly Park. Despite
an investment of A$600 million developing the car, initial sales projections have so far proven optimistic; after only six
months Mitsubishi scaled back production from 90/day, and reduced the working week from five days to four. It
remained an ongoing concern in the Australian auto industry as to whether this would be sufficient to restore the plant
to profitability and ensure its long term survival.

The drop in local sales could not be mitigated by exports outside of the Australian and New Zealand market. On
February 5, 2008 Mitsubishi Motors Australia announced it would be closing down its Adelaide assembly plant by the
end of March. Between 700 and 1000 direct jobs would be lost and up to 2000 jobs will be lost in industries
supporting Mitsubishi's local manufacturing operations.

Revitalization plan

The Mitsubishi i at the Tokyo Motor Showin 2005.

After a starvation of new investment caused by lack of cashflow, the company introduced the award-
winning Mitsubishi i kei car in 2006, its first new model in 29 months, while a revised Outlanderhas been introduced
worldwide to compete in the popular XUV market niche.] The next generation of its Lancer and Lancer Evolution was
launched in 2007 and 2008.

Page 19
Slow selling vehicles were eliminated from the U.S. market, purchase projections for the Global Engine
Manufacturing Alliance have been scaled back, and 10,000 jobs have been shed to cut costs with 3,400 workers at
its Australian plant and other loss-making operations still under threat. Meanwhile, in an effort to increase production
at its U.S. facility, new export markets for the Eclipse and Galant are being explored in Ukraine, the Middle East,
and Russia, where the company's bestselling dealership is located. Mitsubishi has also been active
in OEM production of cars forNissan, and announced a similar partnership with PSA Peugeot Citroën in July 2005 to
manufacture an SUV on their behalf.

Mitsubishi reported its first profitable quarter in four years in the third quarter of 2006, and returned to profitability by
the end of the 2006 financial year, and sustained profitability and global sales of 1,524,000 through 2007 and later.

In January 2011, the company announced its next mid-term business plan to introduce eight hybrid and battery-
powered models by 2015. It aims to sell its first two plug-in hybrids by fiscal 2012.

Electric vehicles

Mitsubishi Motors will start selling its i MiEV, the all-electric mini-car with a lithium-ion battery pack tucked under its
floor, to retail customers in the summer 2009, a year ahead of schedule. The automaker had initially planned to start
leasing the minicar-based vehicle to businesses and municipalities in the summer 2009 and to wait until 2010 for the
retail launch. It has also announced its plans to offer five other e-drive vehicles.

Mitsubishi Motors aims to cut the price of its electric vehicles to 2 million yen ($21,890) by fiscal 2012—down 30
percent

Motorsport

Mitsubishi has almost half a century of international motorsport experience, predating even the incorporation of MMC.
Beginning with street races in the early 1960s, the company found itself gravitating towards the challenge of off-road
racing. It dominated endurance rallies in the 1970s, the Dakar Rally from the '80s, and the Group A and Group
N classes of the World Rally Championship through the '90s. Ralliart (later Mitsubishi Motors Motor Sports), was
Mitsubishi's racing subsidiary, although the company ceased competing formally in 2010. [44]

Circuit racing
Mitsubishi's motorsport debut was in touring car racing in 1962, when it entered its Mitsubishi 500 Super DeLuxe in
the Macau Grand Prix in an effort to promote sales of its first post-war passenger car. In an auspicious debut, the
diminutive rear-engined sedan swept the top four places in the "Under 750 cc" category, with Kazuo Togawa taking
class honours. The company returned the following year with their new Colt 600 and again swept the podium with a
1–2–3 in the "Under 600 cc" class. In its final year of competition with touring cars in 1966, Mitsubishi scored a

Page 20
podium clean sweep in the "750–1000 cc" class of the 1964 Japanese Grand Prix with the Colt 1000, their first front-
engined competition vehicle.

The company began concentrating on the Japanese GP's emerging open-wheel "formula car" categories from 1966,
winning the "Exhibition" class. They also scored class 1–2 in 1967 and 1968, and reached the podium in 1969 and
1970. They finished on a high with an overall 1–2 in the 1971 Japan GP, with the two litre DOHC F2000 driven by
Kuniomi Nagamatsu

Off-road racing

Mitsubishi Lancer 1600 GSR.

The East African Safari Rally was by far the most gruelling event on the World Rally Championship calendar in the
1970s. MMC developed the Lancer 1600 GSR specifically for the marathon race, and won at the first attempt in 1974.
Their highpoint was a clean sweep of the podium places in 1976 in an event where only 20 percent of the starters
typically reached the finish. They also achieved a 1–2–3–4 in the 1973 Southern Cross Rally, the first of four
consecutive victories in this event with drivers Andrew Cowan and Kenjiro Shinozuka.

Mitsubishi Lancer WRC05.

During the 1980s Mitsubishi continued to participate in the WRC, first with the Lancer EX2000 Turbo and the Starion.
It then scored its first outright Group Avictories with a Galant VR-4 in the late '80s, Mitsubishi homologated the Lancer
Evolution, and in the hands of Finland's Tommi Mäkinen, winner of thedrivers' title for four consecutive years (1996–

Page 21
1999), they won the manufacturers' championship in 1998. They have won 34 WRC events since 1973. The Lancer
Evo has also dominated the FIA championship for showroom-ready cars, winning seven consecutive Group N titles
with four different drivers from 1995–2001. Even in 2002 when it ostensibly lost the title, the class-winning
manufacturer was Proton using a Lancer Evo-based Pert.

Mitsubishi is also the most successful manufacturer in the history of the Dakar Rally, one of the most challenging and
dangerous motorsport events in the world. MMC's maiden entry was in 1983 with their new Pajero, and it took only
three attempts to find a winning formula. Since then, they have won in 1992, '93, '97, '98, and '01–'07, an
unprecedented seven consecutive victories and twelfth overall with nine different drivers.

Jackie Chan

Mitsubishi has a 30 year long association with movie star Jackie Chan, who has used their vehicles almost
exclusively in his movies throughout his career. The Jackie Chan Cup, first held in 1984, is an annual celebrity auto
race involving international motor journalists and starlets from across Asia in Mitsubishis with professional Touring
Car drivers alongside for assistance, and was held before the Macau GP until 2004 when it moved to Shanghai. In
September 2005 Ralliart, Mitsubishi's motorsport arm, produced 50 Jackie Chan Special Edition versions of
the Lancer Evo IX; Chan acts as the honorary Director of Team Ralliart China.

Locations

The company has seven vehicle manufacturing facilities in five

countries, Japan, Netherlands, Philippines, Thailand, United States, and twelve plants co-owned in partnership with
others.[5][61] It also has three further engine and transmission manufacturing plants, five R&D centres and 75
subsidiaries, affiliates and partners. Its vehicles are manufactured, assembled or sold in more than 160 countries
worldwide.

Mitsubishi Joint Venture

Hindustan has a joint venture with Mitsubishi that started 1998. The plant is located in Thiruvallur, Tamil Nadu.

Page 22
Page 23
 CHAPTER -3

METHODOLOGY OF THE STUDY / DESIGN OF THE

MINOR PROJECT
3.1.INTRODUCTION

i)                  Meaning of Research has confined to the concept:-

As per the author Philip Kotler, Marketing Research is the systematic design, collection, analysis
and reporting of data and findings relating to a specific marketing situation facing the company.

To meet this objective, the company should know its customers, their needs, tastes, preferences &
condition of markets etc. This information is provided by Market Research. In this study we
confine to reach the service rendered by the Mitsubishi Motors to satisfy the customers.

ii)                Rationale behind the study:-

Theoretically whatever we study in management courses can be easily accumulated and

understood   only when it is used practically, when theoretically; knowledge is put into practice, the
problems, obstacles or the impediments will come out and suitable marketing strategies can be

Page 24
implemented to solve it, then there will be a perfection and experience and clear knowledge about
the subject in the mind of the learners.  That is why in every management or career advancement
courses, a Practical Training like simulations, case study, project Reporting, working situation are
given.

3.2.TITLE OF THE STUDY

Study on Consumer Perception towards after sales service (with special reference to
Mitsubishi Motors pvt. Ltd)
What is consumer?
Consumer is a usually referred to any individuals or households that use goods and
services generated within the economy.

What is after sales services?

After sales services are the services provided by the retailers or shopkeepers

after the sale of a product. Eg: home

delivery Consumer service Repairs Guarantee.

3.3.STATEMENT OF THE PROBLEM

In today’s scenario in the automobile sector after sales servicing is also facing cut throat
competition and trying to give the best service, to have competitive advantage over their

Page 25
 competitors. Assessing the consumer satisfaction level for Mitsubishi Motors Auto Pacifica . it
also tends to find out the consumer view about important aspects of the service. At the same time it
was intended to find the consumer view regarding the product and quality of service and after sales
service provided and analysis and interpretation thereof.

3.4. OBJECTIVE OF THE STUDY

1. General: To evaluate consumer perception towards after sales service of Mitsubishi

Motors Auto Pacifica . in Bangalore city.

2. Specific: To observe perception of consumers on the after sales service provided by

Mitsubishi Motors Auto Pacifica . and to make a detailed research study and analysis of
Mitsubishi Motors after sales service.

3. Suggestive: To find out the status and perception among the consumers on the brand
“Mitsubishi Motors” in the market at Bangalore.

Page 26
 3.5. SCOPE OF THE STUDY

The scope of the study is limited to the after sales services offered by Mitsubishi Motors Auto
Pacifica . The study objective is to examine the various factors which play their part in consumer
perception on after sales service on Mitsubishi Motors cars and the major dissatisfaction areas for
the consumers. The study considered the central area of Bangalore city. The sample under
consideration consisted of the existing consumers of Mitsubishi Motors Auto Pacifica . products.

3.6. RESEARCH METHODOLOGY

Since the study is conducted to find out the consumer perception and opinion towards Mitsubishi
Motors cars sold by Mitsubishi Motors Auto Pacifica ., convenient sampling method is used.

3.7. SAMLPE AND SAMPLING TECHNIQUES

Page 27
The sampling unit for the study is 50, which includes 2 models of Mitsubishi Motors cars sold by
Mitsubishi Motors Auto Pacifica . The sampling size includes male and female users from
different occupations, age and income groups. The sampling size was restricted to 50 because of
the time constraints. Here, convenient sampling technique has been adopted for collecting the
primary data.

3.8. TOOLS OF DATA COLLECTION

PRIMARY RESEARCH:

The primary data are collected through survey method. A survey was conducted among the people
of Bangalore City by the aid of well structured questionnaire.
The questions contained in the questionnaire are of two types:

1. Open- Ended Questions:

Where the respondent was given a chance to reply or give suggestions to the Company. This
includes free response questions where the respondents were given the freedom to give
suggestions. There was four open ended question.

Page 28
 2. Close-Ended Questions:

Where the respondent was given a lesser chance to reply or give suggestions. This includes
multiple choice questions where the respondents were given a number of alternatives. There were
ten close end questions.

3.9. PLAN OF ANALYSIS

Calculations have been done for interpretation, such as percentages. This report has been covered
with tables, and charts obtained from sources such as questionnaires, personal interviews etc. The
data collected from respondents through questionnaire are organized, coded, processed and
tabulated in order to create tables and charts to make the project understandable and meaningful.

3.10. REFERENCE PERIOD

Page 29
 This project study was taken up in march 2011 and completed by 31st March 2011. The
project period is approximately 30 days.

3.11. LIMITATION OF THE STUDY

1. The study was restricted to only those clients who were related to Mitsubishi Motors car
owners and the cars purchased only from Mitsubishi Motors Auto Pacifica .
2. The study was confined within specific regions of Bangalore City only.
3. The sample size was limited to the results obtained from the study may not be
generalized for the whole population.
4. The time period of the study was not sufficient to measure the consumer’s response
effectively and reach to a more valid conclusion.
5. Many of the respondents may not give the correct information due to personal bias.

CHAPTER -4

DATA ANALYSIS AND INTERPRETATION

TITLE OF THE TABLE

Table No. 4.1

Page 30
Gender

Table No. 4.2

Age Group

Table No. 4.3

Occupation

ANALYSIS OF THE TABLE

Table No. 4.1

Gender No. of Respondents Percentage of

respondents
Male 31 62%

Female 19 38%

Total 50 100%

Page 31
 Sales

Male
Female

Analysis: It is observed from the table 4.1, that majority of the respondents which uses Mitsubishi
Motors cars are male with 62% out of total respondents. And less number are of female which uses
Mitsubishi Motors cars with 38 % out of total respondents.

Table No. 4.2

Age Group No. Of Respondents Percentage of

respondents
20-35 17 34%
35-50 24 48%
50 and above 9 18%
Total 50 100%

Page 32
 Sales

20 - 35
35 - 50
50 & Above

Analysis: From the above table No. 4.2, it is observe that majority of the respondents come under
the age group of 35-50 i.e. 48% and the rest are divided amongst the age group of 20-35 i.e. 34 %
and age group of 50 and above i.e. 18 % with a less gap.

Table No. 4.3

Occupation No. of respondents Percentage of

respondents
Business Man 21 42%
Student 12 24%
Service Class 10 20%
Others 7 14%
Total 50 100

Page 33
 Sales

Business Man
Student
Service Class
Others

Analysis: What has been analysed from the table 4.3, that majority of the respondents which fall
under the Business class category purchases Mitsubishi Motors cars the most i.e. 42 % which is
maximum among all classes. And very less number of respondents fall under others category that
rarely purchase Mitsubishi Motors cars i.e. only 14 %.

Page 34
GRAPHICAL PRESENTATION (pie chart, bar diagram)

1. Which Mitsubishi Motors car you own?

Name of the car No. of Respondents Percentage

Lancer 20 40
Cedia 10 20
Pajero 6 12
Outlander 10 20
Lancer Evoultion X 0 0
Montero 4 8

INTERPRETATION / INFERENCE OF THE TABLE

45
40
35
30
25
20
15
No. of Respondents
10 Percentage
5
0
er a o
de
r X ro
nc di jer n on te
La Ce P a
tla
ul
ti on
Ou Evo M
er
a nc
L

Analysis: From the above Question, it is observed that Mitsubishi Motors is the largest
selling car as it was a concept model of Mitsubishi Motors and majority of the respondents
chose Polo out of 4 models with a frequency of 21 out of 50.

Page 35
 2. Monthly household income?

Rupees per month No. of Respondent Percentage of

Respondent
1, 00,000 – 1, 50,000 7 14%
1, 50,000 – 2, 00,000 18 36%
2, 00,000 – 3, 00,000 19 38%
3, 00,000 and above 6 12%
Total 50 100

Series 1
20
18
16
14
12
10
8
6 Series 1
4
2
0
0 0 0 e
,0
0
,0
0
,0
0 ov
50 00 00 ab
, , , d
–1 –2 –3 an
0
00 00 00 00
0,
0
0,
0
0,
0
0 0,
0 5 0 3,
1, 1, 2,

Analysis: From the above graph, the majority of the respondents whose income is between Rs. 1,
50,000 to Rs. 3, 00,000 purchase Mitsubishi Motors cars a lot in very less number whose income is
above Rs. 3, 00,000 and below 1, 50,000 do not purchase Mitsubishi Motors that regularly.

Page 36
 3. Are you satisfied with Mitsubishi Motors services?

Satisfaction Level No. of respondent Percentage of

Respondent
Yes, fully satisfied 6 12%
Average 26 52%
Less than average 13 26%
No, very disappointed 5 10%
Total 50 100

Page 37
 Level of Satisfaction

30
25
20
15
Level of Satisfaction
10
5
0

fie
d ge ge ed
tis era era int
sa v av o
ly
A
an pp
l
th si a
fu yd
es, ss
er
Y Le ,v
No

Analysis: From the above graph, the majority of the respondents of Mitsubishi Motors cars owners
are average satisfied, and there are people who are not satisfied and less satisfied whose main
reason is parts of Mitsubishi Motors cars are too expensive. So it’s difficult for some customers to
maintain it.

4. Rate of fuel consumption for Mitsubishi Motors cars?

Consumption No. of Respondent Percentage of

Respondent
Better fuel consumption 7 14%
Avg. fuel consumption 27 54%
Low fuel consumption 12 24%
Unaffordable 4 8%
Total 50 100

Page 38
 Fuel Consumption
30
25
20
15
10 Fuel Consumption
5
0
on on on le
pti pti pti dab
r
um um um ffo
ns ns ns a
lc
o
lc
o
lc
o Un
fue fue fue
r ge w
tte ra Lo
Be e
Av

Analysis: From the above graph, it is observed that majority of the respondents are happy with the
Mitsubishi Motors fuel consumption, as it covers 54 % of the total survey and 8 % says that it’s
unaffordable.

5. Why did you buy Mitsubishi Motors cars?

No. of Respondent Percentage of
Respondent
After sales service 6 8%
Comfort and convenience 17 34%
Attractive looks 14 28%
Fuel type 17 34%

Total 50 100

Page 39
 Reason for buying MITSUBISHI car

German technology

Attractive looks

Comfort and convenience

After sales service

0 2 4 6 8 10 12 14 16 18

Analysis: From the above graph, it is observed that majority of the respondents have bought
Mitsubishi Motors car fuel due to its comfort and technology as both of them covers 34 % of
the total survey and 28% due to attractive looks and for after sales services they are very less
in no.

Page 40
 CHAPTER - 5

SUMMARY OF FINDINGS, SUGGESTIONS & CONCLUSIONS

The findings should be summarized and presented in a paragraph form numbering them. Conclusion of the
project should be given to justify the objectives. Suggestions should be specific, practical and clear. Issues
of implementation should be specified.

BIBLIOGRAPHY
The reference made Textbooks, Journals, Newspaper and Magazines are to be listed in this section. The
order followed is –

 Name of the author, year of publication, name of the book, edition of the book, name of the publisher,
place of publication, and page nos.
 The source of Internet and Web site may also be mentioned with correct address of the site

Example

Bain, Joe S. (1968). Industrial Organization, John Wiley, New York.

Aaker, D.A. (1995). Developing Business Strategies, 4th edition, New York: John Wiley and Sons.

Page 41
APPENDICES AND ANNEXURE
A copy of questionnaire and photocopy of the company documents such as financial statements, brochures
etc from the organization may be annexed.

Page 42