Osamu Masuko’s Paul Smith cufflinks twinkle in the bright lights of a conference room in the bowels of a central London hotel. The Mitsubishi Motors Corporation (MMC) chief executive loves British design, and these green, red and yellow striped accessories are shaped to form one of the most recognisable icons of UK manufacturing: the Mini.
Looking a good decade younger than his 65 years, Mr Masuko carefully examines the five-star hotel’s complimentary gold-embossed pink pen as he sums up just why Britain is MMC’s new favourite country. “The UK plays a central role in Europe, politically and economically in Europe. Being successful in the UK means being successful in Europe.”
With new titles of chief executive and chairman (he was formerly president), Mr Masuko was making a flying visit to Britain this week, looking at local showrooms, before heading to the Paris Motor Show, which opens to the public tomorrow. Two and a half years after MMC stunned the market by announcing that it would no longer produce cars in Western Europe – delivering vehicles to the continent from Japan and Thailand rather than the Netherlands – Mr Masuko is eyeing up other ways to profit in an EU market that is finally in recovery.
In August car sales were up 2.1 per cent in the EU and 9.4 per cent in the UK from the same month last year, according to the Association of European Automobile Manufacturers. Europe, then, is finally seeing decent industry numbers after years of struggling through a financial crisis that hit consumer spending so badly.
In his set-piece speech at the Conservative Party conference in Birmingham this week, David Cameron triumphantly declared that “our car industry is booming”. He noted that engines are “not imported from Germany, but built down the road in Wolverhampton”, referring to a Jaguar Land Rover plant that opens next year. This site will produce an engine every 36 seconds when it reaches full capacity.
“Countries in Europe are mostly on an upward trend [for car sales],” Mr Masuko says through his translator. “The Government of the UK has an understanding of environmental technology… We wish to be the top leaders in environmental technology – we’re going in the same direction.”
In May, MMC launched its plug-in hybrid Outlander, a spacious sports utility vehicle boasting “incredible fuel economy” that can be driven as a fully-electric car. The Outlander costs £28,249, once a £5,000 government grant rewarding purchase of plug-ins is factored in, and a high-capacity battery means the petrol or diesel engine is rarely switched on during urban driving, so it is an ultra-low carbon emitter.
It is already the UK’s most popular plug-in electric vehicle that can also use a petrol or diesel engine. About 1,200 were sold in the four months since launch, comfortably beating longer-established rivals such as the Vauxhall Ampera and the Toyota Prius Plug-In, as well as creating 400 MMC jobs in the UK, including work at a final assembly plant in Bristol and at its head office in Cirencester.
By 2020, MMC expects about 20 per cent of production will be in hybrids. In that time there will be five further UK launches of cars using the group’s hybrid technology.
Mr Masuko is banking on the UK’s political and industry leadership in environmental technology being aped around the continent over the coming years. “In Europe there are environmentally aware people,” he says, adding that the UK is “a big influence on other countries”.
Mr Masuko, who helped restore MMC’s reputation when he was made president and chief ethics officer nine years ago in the wake of a scandal involving the cover-up of defects on 800,000 vehicles, doesn’t envisage reopening production plants in Europe any time soon. “Actually, the key words to growth are emerging markets and environmental technology,” he says, later pointing to a tie-up with Chrysler in Mexico as a key partnership in a fast-growing economy.
This is a strategy that seems to be paying off. Badly hit by the financial crisis, MMC’s woes were compounded by the strong yen and anti-Japanese sentiment in China. This resulted from the flare-up of a historic territorial dispute over the uninhabited Senkaku Islands – or, in China, the Daioyu Islands – in 2012, just a year after trade between the two countries hit an all-time high of $345bn (£213bn).
But by the end of the 2013-14 financial year in March, MMC was breaking its own financial records, including $1.02bn of profit on $20.34bn of sales, and paying its first dividend since a 2004 bailout by major shareholders. This was partly down to the recoveries in the US and European markets – where sales were up 14 per cent and 11 per cent to 97,000 and 202,000 vehicles, respectively.
Mr Masuko points out that MMC’s latest three-year-business plan, New Stage 2016, is ahead of schedule, meaning that revised targets will have to be drawn up.
But Mitsubishi’s last annual report does reflect a concern that Mr Masuko frequently returns to when he speaks: the impact of politics on car sales. The report points out the geopolitical risks of 2013, such as the slowing of the Chinese economy, to which can now be added tensions in Ukraine.
“Let me be concrete: the world actually has a lot of problems,” he says. To solve those problems, the traditional powers, including Britain, France and Germany, need to use their political weight to bring swiftly conclusions and calm markets.
Mr Masuko clearly likes his £60-a-pair Paul Smith cufflinks and he certainly wants to sell fuel-efficient vehicles to environmentally concerned motorists. But the suspicion is that he has really jetted in to keep a watchful eye on Europe’s political masters, making sure that they don’t tear another hole in the global economy that so battered his company just a few short years ago.Reuse content