Mitsubishi Loses Money Due To Pandemic, Pajero Car Production Will Be Euthanized

Illustration. (Photo: Mitsubishi)

JAKARTA - The ferocious effect of the COVID-19 pandemic has also spread to the automotive industry. Quite surprising news also came from the Japanese car manufacturer, Mitsubishi.

Quoted from Reuters on Tuesday, July 28, Japan's 6th largest automaker stated that it is prepared to incur losses of up to $ 1.33 billion (IDR 19.29 trillion, exchange rate IDR 14,500 per US dollar) in the fiscal year ending March 2021.

This is Mitsubishi's biggest loss since 18 years ago. The company also made efforts to cut 20 percent of its operating costs.

"To pave the way for recovery, the main step that will be taken is for all executives to share a sense of the crisis with employees at reduced costs," said Mitsubishi Chief Executive Takeo Kato.

The crisis caused by the COVID-19 pandemic has exacerbated Mitsubishi's efforts to survive the fight against falling sales in China and Southeast Asia, which are the largest markets or account for a quarter of the auto company's sales.

One of the steps that Mitsubishi will take is to inject one of their flagship cars in the sales line, the Mitsubishi Pajero SUV.

This SUV will begin to stop being produced by Mitsubishi in 2021.

In addition to stopping production of Mitsubishi Pajero, this company will also close one of their factories (Pajero Manufacturing) in Japan. This was done in order to avoid the worst economic crisis that might hit Mitsubishi for the first time in nearly 20 years.

With the closure of the factory, production of Delica and Outlander cars will be moved to Okazaki Manufacturing, a Mitsubishi Motors subsidiary based in the city of Okazaki, Aichi Prefecture, and elsewhere. Meanwhile, some of the employees, which number around 900 people will be moved.

Pajero Manufacturing is the first domestic Mitsubishi Motors factory to close in 20 years.

Mitsubishi Motors is not the only brand that is feeling the impact of the COVID-19 pandemic. Two other automotive giants, Toyota and Honda, also suffered the same fate.

Toyota Motor also decided to close its Higashi-Fuji factory in the city of Susono in Shizuoka Prefecture later this year. Meanwhile, Honda Motor will close its factory in Sayama city, Saitama Prefecture in 2021.

The action to close the factory is aimed at reducing excessive production capacity. This is because the Japanese domestic market in terms of new car sales has indeed shrunk sharply the effects of the COVID-19 pandemic.