Economics assignment writing report analysis on: Mitsubishi Motors Corporation

Mitsubishi Motors Corporation, its investment in Thailand, and proposed sustainable strategies for the next 10 yearsExecutive Summary

Automobile sector is undoubtedly one of the most dynamic sectors in the world. This industry often puts unprecedented challenges in front of the trade pundits due to the changes which take place at break-neck speed. But many experts believe that automobile sector is one of the indicators of the industrial development of a country. There are several factors which change the course of automobile industry viz., FDI, fiscal and monetary policies, rate of raw materials and the business environment of a nation. This industry follows a tupsy-torvy rout. More often than not you are bound to see a growth pattern in the span of some months and immediately, something could go wrong and the industry becomes ready for a slowdown. Such an unpredictable scenario put the experts in frenzy.In recent years, however, the automobile sectors throughout the world are experiencing a downward growth spiral. First the American economic crisis and now the European debt crisis has left some deepest possible scars on the face of Automobile industries the world over. People in these parts of the world are left with a little disposable income and their spending power has taken a serious hit in the span of last four years. Subsequently automobile industry also came under the umbrella of economical repression. The investment in automobile sector worsened with the passing time and the existing big players halted every business plans involving the investment opportunities (in a country or a plant) and acquisitions (of a foreign or a domestic player). Moreover, the competition in the world grew and GM once again out-staged Toyota to become the No. 1 Automobile seller in the world.

Mitsubishi Motors Corporation is one of the Japan’s largest multinational automobile manufacturers with headquarter in Minato, Tokyo (Mitsubishi Motors, 2012). Once upon a time, it was part of the biggest industrial group in Japan known as Mitsubishi Keiretsu and was formed in 1970 as the automotive division of Mitsubishi Heavy Industries (Funding Universe, 2012).

This study is undertaken here to have an insight about Mitsubishi Motor’s investment strategies in Thailand and find out whether these strategies can be sustained over the course of upcoming 10 years.

Introduction

Overview of Japan’s Motor Manufacturing Industry

Automobile sector has emerged as one of the largest and the most prominent industries in Japan. Japanese automobile manufacturers are regarded as one of the best players in the automobile industry throughout the world in terms of quality in their offerings. Japanese automobile industry was the largest motor manufacturer in the world till 2008 which cemented their status as the finest automobile manufacturer in the world. However they lost this position to the China in 2009 who also happens to be the current world leader in automobile manufacturer in the world now.Japanese automobile manufacturers started making vehicles in the late 1910’s when they started making commercial trucks for the domestic uses. However the demand for the trucks increased greatly during the Second World War. Till that day, they were modeling their vehicles (Trucks mainly) after the designing of European products. Since the demand was very low prior to the Second World War, the Japanese manufacturers were designing and making their own vehicles or tying up with a European manufacturer to produce and sell their vehicles under the license. But the Second World War changed this scenario forever. The Japanese manufacturers dared to take an extra step after this event and shed their image of a follower. They finally decided to use their expertise to design and sell their vehicles on their own (Japan Automobile Manufacturers Association n.d.).

In the years to follow, Japanese automobile manufactures made rapid strides in the field of Robotics Engineering. By the end of 1970’s, they became an expert of immeasurable repute of Robotics and started using this technology in the field of automobile manufacturing (Japan Automobile Manufacturers Association n.d.).

Japan is the home of a horde of famous automobile manufacturers in the world. The list includes some of the best players in automobile industry like Toyota, Honda, Nissan, Mazda, Suzuki, Mitsubishi, Isuzu, Kawasaki etc.

Overview of Mitsubishi Motors Corporation and its investment in Thailand, specifically Mitsubishi Motors (Thailand)

Mitsubishi Motors is the sixth largest Japanese and the sixteenth largest automobile manufacturer in the world with an employee base of 30,709 and revenue in excess of ¥1,828 billion (Mitsubishi Motors, 2011). It was founded in April 22, 1970. The key people of Mitsubishi Motors include Takashi Nishioka as the chairman of the company and Osamu Masuko as the president and representative director (Mitsubishi Motors, 2012).

Mitsubishi Motors (Thailand) Co., Ltd. (MMTh) is the Thai subsidiary of Mitsubishi Motor Corporation (Mitsubishi Motor , 2012). Ever since its inception, it has witnessed a phenomenal growth. It became the country’s first automobile manufacturer to sell and export the vehicles in overseas markets and in meanwhile, became the largest exporter of automobiles in Thailand. The company owns the brands like Lancer, Grandis and L 200 Strada/Triton which are produced locally (Mitsubishi Motors press release, 2005).The Thai subsidiary is one of the four largest Mitsubishi facilities outside Japan. In the recent years, the company has sensed a surge in demand for the pick-up trucks in the country and thus is planning to invest 21 billion Thai baht (1 billion Japanese yen) in upcoming years (Santan Santivimolnat, 2004).

Thailand is one of the most productive automobile markets for Mitsubishi. For the last 20 years, the operations of Thailand have helped Mitsubishi elevate its status as one of the world’s finest automobile manufacturer. Mitsubishi’s Thai operations have become the company’s number one production and export hub in the world. Seeing the future in a brighter light, Mitsubishi has recently announced to invest an additional 1 billion Thai Baht in 2013 to raise the production at its Bt15-billion third assembly plant in Thailand (Kanittha Panthong 2012).

This new strategy is showing the importance of Thailand in Mitsubishi’s future plans. The Thai auto market is expected to touch a figure of 2 million vehicles per year, an increased figure from a record 1.35 million this year which surprisingly beat the forecasted figure of 1.20 million. Mitsubishi strongly believes that Thai market is still has the chances to grow and is far from saturation. Thai Government has introduced a new program known as First Car Buyer Programme which has boosted the car sales in the country lately. Mitsubishi has a forecast for future which estimates the car sales around 1.1 million-1.2 million in 2013 (Kanittha Panthong 2012).

Mitsubishi is posting healthy figures year after year in Thailand. Last August, it sold 11,653 vehicles in Thailand, showing an increase of 77 per cent from August 2011. The sales figure for the passenger cars has shown an unbelievable increase of 580 per cent and reached the figure at 4,131. This surge in Passenger car sales is fuelled by the introduction of Mirage eco-star car which has been highly popular in Thailand. All these encouraging figures were further boosted by an increase of 25.9 per cent in the pickup sales category elevating the sales at 7,522 units. Mitsubishi currently has the market share of almost 10 per cent in Thailand and they want to increase it by more than 15 per cent in upcoming years (Kanittha Panthong 2012).

In 2010 Mitsubishi Motors, in order to check the possibility of using electric cars in Thailand, signed an agreement with the Thai government. They once again joined hands with the Metropolitan Electricity Authority and PEA Encom International to work on an infrastructure plan for the Thai cities and conduct a market research pertaining to increased traffic problem in Thailand in mid-2011. (Kanittha Panthong 2012). In this way, Mitsubishi Motors Thai subsidiary is contributing significantly to the growth of That Automotive industry which ultimately leads to the growth of the nation.Conclusion

Strategy formulation is a very key part of business operations for any organization. A company must make strategies which can lead it to leadership position in future. Strategies could be a source of competitive advantage. Companies must make sure that these strategies prove efficient for business process and can help the companies to have sustainable competitive advantage over a period of time. Mitsubishi Motors should concentrate on its strength and work hard to regain its leadership position in Thai Automobile Market. Mitsubishi must formulate strategies to gain a competitive advantage in the marketplace and ensure proper execution of them.

If you want Economics Management Assignment Help study samples to help you write professional custom essay’s and essay writing help.

Receive assured help from our talented and expert writers! Did you buy assignment and assignment writing services from our experts in a very affordable price.

To get more information, please contact us or visit www.myassignmenthelp.Com