Mitsubishi Will Build Outlander Sport in U.S.

Mitsubishi Will Build Outlander Sport in U.S.

By Michelle Krebs February 4, 2011

Japanese automaker Mitsubishi announced today that it will produce its newly introduced Outlander Sport crossover at its plant in Bloomington-Normal, Ill., beginning in mid-2012. The vehicle, now made in Japan, will be sold in the States as well exported. Mitsubishi Motors North America President Shinichi Kurihara said Outlander Sport production in Illinois reinforces the automaker's commitment to the U.S. market.

"Mitsubishi Motors remains fully committed to producing vehicles in Normal," he told plant workers, government officials and UAW leaders at a ceremony at the plant this morning.

Commitment Was in Doubt
Mitsubishi's commitment to the plant and the U.S. market had been in doubt in recent years as the automaker's sales kept sliding and the fate of the Illinois plant stood in limbo. Even some government officials in Japan urged Mitsubishi to withdraw from the U.S. market because of its poor performance.

The current models assembled at the plant - the Galant sedan, Endeavor SUV and sporty Eclipse and Eclipse Spyder - are scheduled for phase-out by spring 2013. Until today, Mitsubishi had hinted at no replacements, suggesting the plant was in danger of closing and the 1,300 workers would lose their jobs.

Now the plant and its UAW-represented workers have won a reprieve. The Lancer-based Outlander Sport has been Mitsubishi's saving grace, reversing the automaker's sales slide. It has been equally popular outside the United States where it is badged as the RVR and ASX. Kurihara said half of the Illinois production of the Outlander Sport will be exported, vastly improving the plant's long-term future.

A Downward Slide
The plant in the Bloomington-Normal area originally was a joint project between then-affiliated Mitsubishi and Chrysler. At its peak in the 1990s, the plant built some 200,000 Mitsubishi and Chrysler vehicles a year; it now produces less than 30,000 Mitsubishi-only models. Employment fell from 4,000 in 1998 to 1,300 today.

The models the plant now produces - the Galant sedan, Endeavor SUV and sporty Eclipse coupe and Eclipse Spyder - are Mitsubishi's slowest sellers and oldest models, not substantially updated since the early years of the last decade.

As a result, Mitsubishi's sales have been on a downward slide. In 2002, Mitsubishi sold 345,963 vehicles in the United States; Mitsubishi closed 2010 selling a scant 55,683 vehicles.

Exceedingly low plant utilization obviously translates to an unprofitable operation, a situation Kurihara insists will be reversed with the production and export of the Outlander Sport. "With the new model, the plant will have better utilization, and, of course, we will see improved efficiency when we eventually consolidate to one model with higher production volume."

Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.