If you have followed the auto industry at any rate for the past 10 years it probably does not come as much of a surprise the state of affairs that Mitsubishi motors finds themselves in today. We may have not know what would be their undoing, but we did all assume that it wouldn’t really be a matter of “if” but more so a matter of “when.” Mitsubishi is trying to atone among the public, there is not a degree low enough they would bow to atone for a breach of faith this sever. This is not to say that it is as bad as Volkswagen. But that being the case what Mitsubishi doesn’t have is a track record of a superior product, and they also do not have the financial resources to bail them out that Volkswagen has. This is bad considering the trend of most automakers. 

On Wednesday the president Aikawa made the announcement that he would be resigning immediately that will go into effect June 24. this is to take responsibility for the automaker overstating the fuel economy of its minicars and not correctly testing other models reaching as far back as 25 years. This is systemic and if it is 25 years in the making you can’t say that he is the sole reason, however, someone has to go, and the shareholders need to feel reassured that steps are being taken to rectify this blight on the reputation of their investment. This is going to cost the company a pretty penny, some experts believe something to the tune of $2.8 billion of its market value. This would be a big deal for a company like General Motors or Toyota, but for Mitsubishi it may be the final nail in the coffin for a long struggling car company.

mitsu“we thought we had sufficient investigations after previous cheating cases in 2003, but it was not enough, problem has deep roots,” the CEO announced.

Mitsubishi Motors has put forth efforts to reach ambitiously for fuel efficiency targets were also undercut by the fall out of its last major crisis. An employee said that “the key issue is that life’time employees live in a small society that has all the same types of people, they car more about what is happening within a five meter radius than common sense outside of it.” and it is that insulated mentality that may be damming the company and its future prosperity. 

What makes Mitsubishi Motors unique among auto makers is that they are part of the Mitsubishi corporation and are a not the flagship company within that more than 10 company system. However, they all adhere to the name Mitsubishi. Therefore, bad press for one is bad press for all and what may happen is that they simply dissolve the entire branch entirely. This could be seen as a kind of trimming the fat among investors and save the whole while still maintaining consumer trust. At any rate, no matter what they do they are going to be feeling the ill effects for some time to come and on the whole it does not look like there is an end in sight.

 

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