Mitsubishi Motors Strengthens Overall Business With Truck & Bus Spin-off
Tokyo, Japan, Sept. 20, 2002 - (JCN Newswire) - Mitsubishi Motors Corporation (MMC) today announced spin-off plans for its truck and bus operations. The new entity, Mitsubishi Fuso Truck and Bus Corporation (MFTBC), will be established as a wholly owned subsidiary of MMC on January 6, 2003, following approval at an extraordinary general meeting of shareholders slated for November. In spring 2003, DaimlerChrysler (DC) will purchase a 43 percent stake in MFTBC for an approximate value of 89 billion yen, while several Mitsubishi group firms will make a collective purchase of 15 percent worth around 31 billion yen. The remaining 42 percent will be held by MMC. Mitsubishi Fuso currently commands a leading position in the Japanese truck and bus market, and has positioned itself as a key player in Asian commercial vehicle markets. Like other makers of commercial vehicles in Japan and overseas, it is facing increased cost pressure and competition in an industry characterized by a strong trend towards realignment and far-reaching alliances. The direct tie-up between DC-the world's biggest truckmaker-and MFTBC will allow the latter to consolidate its leading position in Japan as well as further enhance its overseas business. The alliance enables both companies to complement each other's strengths in the best possible way. "We expect to see our alliance with DaimlerChrysler in trucks and buses gain further momentum," said MMC President and CEO Rolf Eckrodt. "We will reap the benefits of economies of scale and additionally be able to tap into DC's wealth of knowledge and technology more directly." The investment by members of the Mitsubishi group reflects their confidence in the future of MFTBC and will help strengthen the financial base of the company. MFTBC is expected to gain a better market position in Japan and overseas thanks to improved cost performance, quality control, and overall product marketability. Costs will be reduced further by expanding global purchasing capabilities, jointly investing in new areas such as environmental technologies, collaborating on the development of vehicle chassis and components, and sharing common powertrains, in addition to a strengthening of global sales and distribution networks. The truck and bus spin-off will allow the top management of MMC to focus solely on passenger car operations and thus accelerate the ongoing turnaround. The spin-off also puts MMC in a strong position to further stabilize the financial standing of its passenger car division, which will substantially reduce interest-bearing debt. This, along with increased flexibility to enhance investments and the heightened alliance with DC, will contribute to strengthen competitiveness and ensure a solid footing for MMC's passenger car operations in the long term. Outline of New Company (estimates for FY2002 end) Name: Mitsubishi Fuso Truck and Bus Corporation Scale of Operations: - 700 billion yen in consolidated sales - 680 billion yen of consolidated assets - 200 billion yen in shareholders' equity at time of establishment - 210 billion yen of interest-bearing debt at time of establishment - 17,000 employees Shareholders: DaimlerChrysler 43% Mitsubishi Motors 42% Mitsubishi group 15% (Mitsubishi Corporation; Mitsubishi Heavy Industries, Ltd.; The Bank of Tokyo-Mitsubishi, Ltd.; and other Mitsubishi Group companies) Board of Directors: 9 members 6 executives 3 non-executives. Chairman: Takashi Usami President and CEO: Wilfried Porth About Mitsubishi Motors Corporation Mitsubishi Motors Corporation was established in 1970 and is one of the few automobile companies in the world that produces a full line of automotive products ranging from 660-cc mini cars and passenger cars to commercial vehicles and heavy-duty trucks and buses. The company also operates consumer financing services and provides this to its customer base. Automobile operations accounted for 98% of fiscal 2000 revenues and financing business, 2%. The company has one hundred and eighty nine consolidated subsidiaries worldwide. Overseas sales accounted for 56.8% of fiscal 2000 revenues. Mitsubishi Heavy Industries, Ltd. is the major shareholder with 25.62% of issued stock.For further information, please visit the Mitsubishi Motors Corporation home page at: www.mitsubishi-motors.co.jp <http://www.mitsubishi-motors.co.jp>