Mitsubishi and Fiat-Chrysler are in an excellent position to revive Diamond Star Motors.
For those of you too young to remember (which thankfully includes me – still), in the 1980s, tying together American and Japanese auto makers for cooperation, was all the rage. Americans knew that the Japanese had something right, that they did not, in building cars. And the Japanese knew that Americans could produce faster and market better. So GM and Toyota created the NUMMI venture, and Chrysler joined with Mitsubishi to create Diamond Star Motors.
DSM was much more integrated than NUMMI. Where GM and Toyota agreed to share insights on production and marketing, Mitsubishi and Chrysler agreed to build joint platforms.
The alliance was arguably the one thing that has kept Mitsubishi alive as an automaker, all these years. Most of their car and SUV platforms today, are the same Chrysler platforms that Chrysler is rapidly phasing out.
After Fiat and Chrysler merged, everyone expected Mitsubishi to need a new suitor; the notion was Fiat wouldn’t want Mitsubishi licensing all their tech.
I should explain really quick here. While Mitsubishi and Chrysler kept the same FWD, mid-size car-and-SUV platform alive for ages, they actually hadn’t collaborated on the tech, officially, in over a decade. This is why the Mitsubishi Lancer and Outlander seem so similar to the Chrysler Sebring and Dodge Journey. Still, each year, both auto makers benefitted because they could ape the other’s improvements – tearing down the former partner’s car, and seeing what they did to improve it. Eventually this led to shared part sourcing of modern radios, and other technology.
For a brief while, that suitor for Mitsubishi, appeared to be Nissan.
Fast Forward to Today
Mitsubishi’s deal with Nissan has fallen apart. Meanwhile, Fiat-Chrysler needs to get the Chrysler 200 and Dodge Dart off their books, so they can become an 80% truck-and-SUV maker in the United States. In doing so, Fiat-Chrysler can stave off massive penalties for having too much CO2, and too low of a Corporate Average Fuel Economy (CAFE). That is why the Chrysler 200 and Dodge Dart will, in the CEO’s words “run their course…” unless “someone else manufactures the next generation.”
I think Sergio Marchionne was making some very cleverly-worded flirtations at Mitsubishi, with those comments.
Mitsubishi is in desperate need for new car platforms. And the Chrysler-led, Fiat-originated Compact US Wide platform is perfect for that.
The Chrysler 200 and Dodge Dart, and the V6 200 in particular (a 295 horsepower beast), are very under-appreciated cars. They need a couple fixes, namely a revised rear door entry.
Full Disclosure: I own a 2015 Chrysler 200S. With a lifetime warranty!
Mitsubishi however needs a new Lancer, badly. Sales bottomed out because, unlike Chrysler, they only had the same aging Sebring platform, and a more advanced AWD system. Not that that’s necessarily a bad thing. But it can’t compete with today’s more advanced cars.
A Solid Match
Chrysler would license the Compact US Wide platform to Mitsubishi. The two companies would collaborate on a platform revision that would put Dart, 200, and Lancer in one Mitsubishi plant. Made by Mitsubishi, but sold by FCA for their cars. That would not impact CAFE – for FCA, that is. My understanding is the CAFE rules would allow Mitsubishi to sell those cars under their CAFE standards, even if they’re bought on an FCA dealer lot.
This is a win-win for both companies. Chrysler can keep a 200 and Dart on their lots, ensuring that they can sell a mid-size car… a good mid-size car… and Mitsubishi gets saved in the process.
It also would be a perfect parting deal for Sergio. Having fallen through with GM, and with Ford, and only a roadster deal with Mazda… Sergio’s campaign to create better tie-ups between auto makers has largely failed. Rebooting DSM would validate his vision, and save FCA’s mid-size ambitions in North America.
The one concern that FCA probably has, is the NEVS situation. When SAAB-Spyker went bankrupt, Saab still had full ownership rights to the GM Epsilon platform. This platform underpinned everything from the Pontiac G6 to the Cadillac BLS. NEVS is now using that to proliferate the car to everyone from China to Turkey.
One solution would be what GM employed with Epsilon II and SAAB. GM realized SAAB-Spyker was unlikely to succeed, and only allowed SAAB-Spyker to access Epsilon II provided it did not go bankrupt, or was sold. FCA could employ a similar tactic with Mitsubishi – but this would be higher risk for Mitsubishi. It would have to keep developing alternate car platforms, in order to maintain independence.
My only hope is that they actually heed my advice in time. Once the Sterling Heights plant gets re-tooled for Ram 1500 production, it will be much more difficult to sell anyone on the notion of continuing the 200 on its current platform.
Best of all, not only would we get a new Mitsubishi Lancer, it would be based on the Chrysler 200 – which is finally a good car… and both would get revised rear doors.
Sadly, I think FCA will choose to go it alone, and instead elongate the Chrysler 200 into the next-gen Chrysler 300. With Dodge Dart gone, Dodge will then lose serious stature without a value car to sell. The cheapest entry level model would either be the Barracuda – which reports are now pointing to becoming an expensive convertible, or the Challenger, which will start at least at $22,000 decontented.