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Auto parts makers shy from Mitsubishi Motors

TOKYO - An increasing number of automobile parts manufacturers that deal mainly with Mitsubishi Motors Corp are shying away from the struggling auto maker, whose sales have plunged due to product defect cover-up scandals.

Ikuyo Co has temporarily suspended production at an Aichi Prefecture plant that produces plastic parts for Mitsubishi Motors, and has moved equipment and employees to other plants.

Meanwhile, the company plans to expand production facilities within the year to boost output by 20-30% at its plant in Kanagawa Prefecture that makes truck parts for firms such as Isuzu Motors Ltd and Hino Motors Ltd.

Until now, Ikuyo has relied on Mitsubishi Motors for about 70% of its transactions, but it plans to decrease this percentage to about 60%.

Aska Corp, whose sales to Mitsubishi Motors account for about 40% of its overall sales, saw sales to the auto maker drop 23% on a parent-only basis in the fiscal first half ended May 31. Because it does not expect a recovery, the company is bolstering sales to auto makers such as Honda Motor Co and Toyota Motor Corp.

The company is planning to change its specialized production line that makes parts for Mitsubishi Motors to a shared line that makes parts for other firms as well. For the full fiscal year, the percentage of sales to the scandal-ridden auto maker is expected to decline 8 percentage points from the previous year to 36%.

Tochigi Fuji Industrial Co, a drive parts manufacturer formally affiliated with Nissan, bought part of a Mitsubishi Motors plant in Nagoya in 2001. At present, its sales to Mitsubishi account for about 40% and to Nissan nearly 20%.

Because of Mitsubishi Motors' trimming of car production, Tochigi Fuji will consider in-house production of parts that it currently farms out, in order to prevent a decline in plant operating rate.

Mitsubishi Motors' domestic sales have plummeted, falling 52% on the year starting in July, due to such problems as reports of defective product cover-ups aimed at avoiding recalls. It is hoping that sales will recover when new models are released in October, but it remains unclear whether the company will be able to reach its minimum target announced in June of selling 220,000 vehicles in fiscal 2004.

(Asia Pulse/Nikkei)

Aug 14, 2004

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