Historiography: 100 Years of Three Diamonds

In 1917, a company that made ships decided to build a car. Over the next 100 years, it would make millions of them for a global audience. It took one movie franchise to put this company over the top.

The last statement is not necessarily true. Prior to its movie stardom, the automotive company in question had many triumphs and low points along the way. The latest low point caught the attention of a rival to take a controlling stake in this historic automaker.

Mitsubishi Motors is celebrating its centennial of its first automobile. Though the company's history dates back another sixty years, its history is an interesting one to tell. It is one that questioned whether it was prudent for a shipbuilder to build a car in the first place. Perhaps Mitsubishi's worldwide enthusiasts were glad they did.

The car in question was the Mitsubishi Model A. In 1917, the hand-built car was seen as a huge risk for the shipbuilder. By this time, mass production is starting to catch on with the larger automakers in North America and Europe.

Backing up a bit, one should look at Mitsubishi as a whole. It was a zaibatsu – primarily, a family-owned enterprise with business units that are interlocked under one management banner. In this case, Yatao Iwasaki created the company that would spawn many enterprises since 1870. His original business was shipping, which also spawned a Heavy Industries unit, for which the shipbuilding enterprise would be borne out of.

The story is unclear to the reason behind Mitsubishi's shipbuilding business in building the Model A car. Somehow. They made a seven-seat car that was inspired by a Fiat of that era. The result was a car that cost more than the mass-produced automobiles found elsewhere in the world – meaning North America and Europe. They only built 22 of these Model As until 1921, when the company scrapped the car.

Although they scrapped the car, Mitsubishi did not lose interest in building automobiles. They kept on trying. In fact, Mitsubishi was a leader in engineering and technology in Japan among automakers. Part of it was their growing expertise in building internal combustion engines and aircraft. Sounds familiar? Think of how many automakers that also built aircraft – BMW comes to mind right off the bat.

A good example of this engineering prowess came with the PX33 in 1937. Though it was designed for military use, it was the first automobile built in Japan to employ four-wheel drive. The use of four-wheel drive would come in handy in the years ahead.

Some might say that Mitsubishi ended up on the "wrong side of history." It is unfortunate since we would see Mitsubishi in the same light as Volkswagen or any Japanese, German or Italian automaker in association with the outcome of World War II. While the war levied a huge outcome for Japan, there was a glimmer of hope for the company's resurgence in the aftermath of the atomic bombings of Hiroshima and Nagasaki, along with the massive rubble across the country.

The first fruits of Mitsubishi's postwar resurgence came as the zaibatsus were forced to be disbanded. Instead, Mitsubishi would emerge as a conglomerate – a more corporate entity rather than a traditional one. Through the family of Mitsubishi's entities, the automotive business began a slow rebound starting with a concentration on necessary vehicles – trucks and small vehicles.

By 1951, Mitsubishi's automotive concern was split in three through regional companies. One such company took on the assembly of Kaiser's Henry J car from completely knocked down kits. Another company got the contract to assemble CKD kits of the Jeep CJ-3A. Some of the Jeep business went to support the Korean conflict, using one of the regional companies as a ready supplier for such vehicles on the South side of the war in Korea. These two activities helped to revitalize the automotive business in Japan. They would soon be joined by rivals, Toyota, Nissan and Isuzu through the 1950s.

In 1953, one of Mitsubishi's regional companies introduced what would be their first postwar car for domestic consumption – the Mitsubishi 500. The small car – known as kei cars – was a necessity in a country that was not entirely friendly to standard-sized automobiles. Like the Volkswagen Beetle, Morris Minor and Renault Dauphine, the Mitsubishi 500 was seen as one way to restart Japan's postwar economy by getting its people mobile again.

The success of the 500 lent to more progress in the 1960s. Mitsubishi began to expand its vehicular offerings starting with an all-new kei car – the Minica. The name would become a cornerstone for the company as it showed its prowess in building kei cars for the domestic market. The last Minica was sold in 2011, but the kei car business continues today.

The company also built larger cars for domestic and export markets. In 1963, the Colt 1000 emerged as a compact car that would spark a boom in exports to neighboring markets. This, despite the lead Toyota and Nissan had on sending their compact cars elsewhere globally – not just in Asia.

The next year saw the introduction of a large car – the 1964 Debonair. While Japan was emerging from World War II, it became successful in doing so, The country looked inward, as well as gaining some footing with the victor from the USA and Europe. It was able to return to "normal" by the time it hosted the Olympic games in Tokyo that year. The Debonair was seen as a car for Japan's most successful people – executives, the royal family, and politicians.

The 1960s rolled on, but something was missing for Mitsubishi. While the Colt enjoyed success in a limited number of markets outside of Japan, they needed a major export hit. Mitsubishi needed a car that would be honored in Japan but will excite customers across Asia, Australia, Europe and the Americas. They saw how Toyota and Nissan were doing in their slow march towards relevancy worldwide. Mitsubishi figured it was their time, too.

In 1969, the Galant made its first appearance on the world stage. It was a handsome compact car that had its sights on the likes of the Toyota Corona and Nissan Bluebird (Datsun 510 in the USA). It would also be the car that would catch the eye of another company – Chrysler.

Chrysler's global operations were looking for an Asian partner for a while to add more and less expensive smaller cars to its portfolio. The idea of the captive import held sway in the USA market for quite a while. Though Chrysler has European operations to send vehicles from, they saw the emergence of the Japanese automotive industry as a further opportunity in North America and elsewhere.

Meanwhile, Mitsubishi was not in the position to establish a North American sales network on their own at the onset of the 1970s. This provided an opportunity for both Mitsubishi and Chrysler to establish a channel for the Galant to be sold through Dodge dealers as the Colt for 1971. Galants were also sold through Chrysler sales units in Australia, New Zealand, and South Africa.

The Galant was a huge success globally for Mitsubishi. Some say it would be a breakout model for the company. It was. The Galant became the export darling for Mitsubishi, which enabled them to expand their lineup in the 1970s to feed the same channels wanting more product to sell.

By 1973, the Lancer was introduced. It would be smaller than the Galant, which meant it had the Toyota Corolla and Nissan Sunny (Datsun 1200/B210 in the USA) to contend with. The Lancer spawned a modern coupe, called the Celeste. The hatchback coupe also added some interest for enthusiasts to look at Mitsubishi with a wider eye, even with a 1.6-liter engine underneath its hood.

While the product lineup was expanding, Mitsubishi's engineering was also getting noticed. Though the cars were knocked by the global press as less than desirable and questioned its quality, it would be innovations, such as the Silent Shaft that would put the company firmly on the map. The Silent Shaft solved a problem four cylinder engines had for eons – instability. By adding two balancing shafts inside the engine, a small four-cylinder engine could operate with ease, become quieter at higher revolutions and would eliminate instability inside the engine itself. It was proven successful enough for Porsche to add the technology to its own four-cylinder engines in the 1980s.

The Silent Shaft was not the only technology that Mitsubishi developed towards its success. The MCA-JET technology was utilized to help add performance to an engine by adding a "Jet" valve inside of an innovative cylinder head. This added more induction into the cylinder head to also help lessen exhaust emissions by a synthesis of lean burn and higher overall operating efficiency.

By 1980, Mitsubishi offered a vast lineup for domestic and export markets. The Mirage became the first export front-drive car sold by the company. New generations of Lancers and Galants, along with coupe variants, added value to all of their markets. Their combined success made Mitsubishi a stronger automotive company at the onset of the 1980s.

Two events help emboldened Mitsubishi's presence on the global stage. With Chrysler in dire straits financially, Mitsubishi purchased their Australian operations completely. Chrysler had been producing the Galant for the Australian market under license, which made the transition between the two companies much easier to accomplish. The Valiant line was supplanted by Mitsubishi's growing line of cars, trucks, and SUVs for Australia, New Zealand and other markets it uses to export to.

While Chrysler continued to sell Mitsubishis through their North American channels, the company felt it was time to establish their name on their own in the world's largest automotive market. In 1982, Mitsubishi began with a network of West Coast dealers, selling three new models not seen at Chrysler-Plymouth and Dodge dealerships.

The biggest star of the brand was the Starion. It would be Mitsubishi's first honest sports coupe with 2+2 seating and a standard 2.6-liter turbocharged engine. Customers were enticed by this powerful coupe, though the 1982 lineup included the Cordia – a small sports coupe replacing the Celeste and Plymouth Arrow – and the Tredia – a new sedan fitting between the Lancer and Galant in other markets. Initial sales were encouraging for Mitsubishi-branded automobiles in the USA, even though Chrysler still sold their versions of the Mirage and Galant coupe at their showrooms.

Mitsubishi soon would expand their own dealerships across the USA, as well as their own lineup to feed these same showrooms. By the end of the 1980s, Mitsubishi would have a full lineup of cars, trucks, and SUVs that were competitive to not only the Japanese brands but to other brands from Europe and the USA.

By 1990, Mitsubishi Motors was a publicly-traded company emboldened with global operations selling their finest lineup ever developed. They forged alliances with competitors adding more value to Mitsubishi's growing global presence. Aside from Chrysler, Mitsubishi helped in Hyundai's leap into the global marketplace. The result is the 1986 Excel compact, which employed a lot of Mitsubishi's engineering know-how underneath its Korean skin. Malaysia's Proton also used Mitsubishi's engineering for their cars. Some were even former cars from Mitsubishi's lineup built at Proton's plants.

The success of the 1980s would lead to some low periods for Mitsubishi, starting with the 1990s. An economic crisis took hold in Asia affecting business across the eastern part of the continent. The crisis hit Mitsubishi hard because the conditions that caused this economic downturn rendered the company vulnerable to their investments, unlike some of their larger, more stable competitors.

The solution was to look at North America to offset the losses back in Japan and across Asia. This was a strategy that was employed by Toyota, Nissan, and Honda. It was not that Mitsubishi was late to the party, but the outright purchase of Chrysler's half of the Diamond Star plant in Normal, Illinois may have seemed a bit delayed compared to the success of other Japanese-owned plants across the USA and Canada. It was the right move, just before things went further south for Mitsubishi.

After a restructuring of the company in 1997, Mitsubishi Motors was embroiled in another huge scandal. In Japan, a cover-up of failures by faulty parts and systems – including brakes, fuel systems and clutches – almost felled the company by 2004. Though the three Mitsubishi executives were indicted by the Japanese justice system, they were found non-guilty. This episode already put the company on notice by the buying public. By this time, Mazda already leaped ahead of Mitsubishi as the third largest manufacturer of automobiles in Japan.

As Mitsubishi reeled from two crises that almost felled the company, its USA arm would provide the pivotal chapter that would put the company on its downward spiral. To boost sales of its lineup – considered the best offered by the company – a financing plan was created in the early 2000s where a customer would put nothing down at the point of sale, with no interest and no payments for the first twelve months.

In business, giving something away for free is a massive risk. There was one such risk that Mitsubishi's USA credit department and sales management may have forgotten to look for. The plan forgot to take into consideration those with risky credit scores and history. Once they failed to make their first payment after a year of not paying anything, then their "0-0-0" loans went into default. They sold thousands of automobiles without recouping one cent on each one of them – to the tune of $454 Million.

Because of this credit debacle, Mitsubishi's USA sales plummeted from 243,000 in 2003 to 119,000 in 2006. Mitsubishi's reliance on the USA remained strong, but its equity was severely weakened to be felt globally – and back in Japan.

Why would Mitsubishi go through the trouble of risking their financial security on sub-term loans in the USA? It would be a cultural event that would give the three-diamond company some relevance with a generation of automotive enthusiasts. In 2001, a movie was made that would center on the youth car culture in the context of a cops-and-criminals plot. The moment when the late Paul Walker played Brian O'Conner and drove up in a modified 1995 Mitsubishi Eclipse asking for "tuna, no crust" may have changed the brand's image as a film legend.

If one thing kept Mitsubishi Motors relevant in the face of financial losses and losing market share, it would be The Fast and The Furious film franchise. It would introduce this new generation of enthusiasts to the joys of driving Eclipses and Lancer Evolutions – and modifying them further.

As with most car companies, certain models are used as lures to their more popular products towards volume sales. The Lancer Evolution series did exactly that. The rally-influenced machine was that lure, giving enthusiasts a high-performance sports compact that would spawn a genre of automobiles still relevant to today's enthusiasts. Its looks were lent to the entire lineup – including its growing SUV/Crossover models. The ASX (Outlander Sport in the USA, RVR in Canada) had an Evo-like nose, which helped sell this small crossover in its strongest markets across the globe.

Still, Mitsubishi was not doing well globally. It needed help – and badly. A huge crisis regarding reporting fuel economy figures to the Japanese government for its kei cars almost nailed the coffin for the car company.

In a twist of fate, its kei car partner, Nissan, found a solution to the fuel economy reporting crisis. Through its alliance with Renault, Nissan purchased a third of Mitsubishi Motors towards a controlling stake in the company. It enabled Renault and Nissan chairman Carlos Ghosn to take the top spot at Mitsubishi with a plan to help, turn the 100-year-old car company around.

It would be easy to turn this article into a speculative piece. It is not. That is a for a future article. This is just recalling the history of an automaker that began with a car built by its shipbuilding business to become a global player – with its ups and downs recorded.

Before you look forward, look back. Understand the ebbs and flows of this company before you call a funeral director. Know what it accomplished before you write its final chapter.

The challenge of any business is to celebrate the legacy it leaves behind in the years prior. On this 100th anniversary of Mitsubishi's first automobile, it is perhaps time to reflect and honor that legacy.

All photos by Randy Stern