Mitsubishi is revamping Okazaki site to cut costs and hike plug-in hybrids output

Article by Christian A., on July 29, 2014

Mitsubishi Motors Corp. is revamping its flagship assembly site in Okazaki, Japan for The ¥4.5 billion ($44.3 million) to cut production costs while increasing capacity. The overhauling operations at the site are meant to reduce the cost of body assembly by 30 percent, while hiking production capacity by 10 percent to 230,000 vehicles.

According to spokesman Tetsuji Inoue, Mitsubishi started to retool the site in January and will be completed in May 2015, adding that this should allow the carmaker to better shift toward electrified vehicles by enabling battery installation along the main line.

The overhaul will also allow the carmaker to produce more plug-in hybrids, which numbers has been restricted by capacity constraints. Inoue said the revamp entails switching from a hanging line to a floor conveyor system, which should allow better fine-tuning of production speed to adapt to increases and decreases in demand.

The Okazaki site will launch a system wherein all the parts needed for a certain vehicle are packaged together, moving alongside the vehicle to allow easy access along the line.

In addition, the system will also employ more robot-driven trolleys that ferry parts. Mitsubishi sees the investment as a way to better its cost base while its jumpstarts a new product strategy that relies more on plug-in hybrid vehicles.

The Okazaki site will be the main production venue for the Outlander PHEV crossover and future electrified vehicles. The site Okazaki is expected to build 86,000 standard Outlanders, 50,000 plug-in Outlanders and 76,000 Outlander Sport compact crossovers in the entire fiscal year ending March 2015.

Under a three-year plan unveiled by Mitsubishi’s then-president now-chairman, the carmaker will focus its lineup on utility vehicles and electrified drivetrains.

Headquartered in Minato, Tokyo, Japan, Mitsubishi Motors Corporation is one of the largest carmakers in the world. Its automotive origins date back to 1917, when the Mitsubishi Shipbuilding Co., Ltd. introduced the Mitsubishi Model A, which is regarded as the first series-production vehicle in Japan. In 1934, Mitsubishi Shipbuilding merged with the Mitsubishi Aircraft Co. to form Mitsubishi Heavy Industries.

In 1950, Mitsubishi Heavy Industries was split into three regional companies, each developing its own motor vehicles. These three companies re-integrated as Mitsubishi Heavy Industries in 1964. To focus on the auto industry, Mitsubishi Motors Corp. (MMC) was established on April 22, 1970 as a wholly owned subsidiary of Mitsubishi Heavy Industries. It was led by Tomio Kubo.

Mitsubishi Motors’s logo of three red diamonds is also shared by more than 40 companies within the Mitsubishi keiretsu.

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