Mitsubishi's automotive origins date back as far as 1917, when the Mitsubishi Shipbuilding Co., Ltd. introduced the Model A, Japan's first series-production automobile. An entirely hand-built seven-seater sedan based on the Fiat Tipo 3,
it proved expensive compared to its American and European mass-produced
rivals, and was discontinued in 1921 after only 22 had been built.
In 1934, Mitsubishi Shipbuilding was merged with the Mitsubishi
Aircraft Co., a company established in 1920 to manufacture aircraft
engines and other parts. The unified company was known as Mitsubishi Heavy Industries (MHI), and was the largest private company in Japan.[8] MHI concentrated on manufacturing aircraft, ships, railroad cars and machinery, but in 1937 developed the PX33, a prototype sedan for military use. It was the first Japanese-built passenger car with full-time four-wheel drive, a technology the company would return to almost fifty years later in its quest for motorsport and sales success.
Immediately following the end of the Second World War, the company returned to manufacturing vehicles. Fuso bus production resumed, while a small three-wheeled cargo vehicle called the Mizushima and a scooter called the Silver Pigeon were also developed. However, the zaibatsu (Japan's family-controlled industrial conglomerates) were ordered to be dismantled by the Allied powers
in 1950, and Mitsubishi Heavy Industries was split into three regional
companies, each with an involvement in motor vehicle development: West
Japan Heavy-Industries, Central Japan Heavy-Industries, and East Japan
Heavy-Industries.
East Japan Heavy-Industries began importing the Henry J, an inexpensive American sedan built by Kaiser Motors, in knockdown kit
(CKD) form in 1951, and continued to bring them to Japan for the
remainder of the car's three year production run. The same year, Central
Japan Heavy-Industries concluded a similar contract with Willys (now owned by Kaiser) for CKD-assembled Jeep CJ-3Bs.
This deal proved more durable, with licensed Mitsubishi Jeeps in
production until 1998, thirty years after Willys themselves had replaced
the model.
By the beginning of the 1960s Japan's economy was gearing up; wages
were rising and the idea of family motoring was taking off. Central
Japan Heavy-Industries, now known as Shin Mitsubishi Heavy-Industries,
had already re-established an automotive department in its headquarters
in 1953. Now it was ready to introduce the Mitsubishi 500, a mass market sedan, to meet the new demand from consumers. It followed this in 1962 with the Minica kei car and the Colt 1000, the first of its Colt line of family cars, in 1963.
Two years after the merger of Daimler and Chrysler
to form DCX, the U.S.-German conglomerate paid US$1.9 billion for a
controlling 34 percent of MMC, in an effort to fulfil chairman Jürgen Schrempp's vision of a "Welt AG"
("world corporation"). The price reflected a US$200 million discount on
the originally agreed figure, caused by the public disclosure of the
defect cover-up scandal. In March 2001 it increased its stake to 37.3
percent when it acquired Volvo's
stake in MMC's truck-making operations, further boosting Mercedes'
share of a market it already dominated. However, boardroom wrangles at
DCX in April 2004 prevented them offering financial assistance as
Mitsubishi attempted to reduce its crippling debts.[11] When a US$4 billion rescue package was agreed with Tokyo-based Phoenix Capital
in May 2004, DCX's stake was reduced to 23 percent, and further
recapitalisations subsequently diluted the holding to 12.4 percent.
Finally, on November 11, 2005, the remaining stock was sold for
US$1.1 billion—an US$800 million loss in five years.[12] Three days later the buyer, investment bank Goldman Sachs, sold the shares on for US$80 million profit.[13]
New major stockholder Phoenix Capital followed suit the following
month, selling all but 50 million of its 575 million shares to JPMorgan
on December 9, 2005. Once again, the investment bank offloaded their
purchase within a few days for tens of millions in profit. In both
cases, the eventual buyers were part of the Mitsubishi keiretsu, returning MMC to Japanese ownership.
