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In Japan, a Car Apart from the Pack

Mitsuoka Motor isn't a household name even in Japan, but its wacky designs are unmistakable—now it's planning to take its quirky approach global

By conventional measures of success, Mitsuoka Motor isn't in the same league as Japan's biggest car companies. Despite celebrating its 40th birthday in February, it's not a household name in Japan—never mind overseas. It doesn't advertise, and with sales of just 750 cars a year, it relies on earnings from its dealership arm, which sells imported Lamborghinis, Chryslers, and Volkswagens (VLKAY), to fund vehicle development.

Yet when it comes to unusual, daring, and sometimes bizarre designs, Mitsuoka cars stand out from the blur of Toyotas (TM), Nissans (NSANY), and Hondas (HMC) on Japan's roads. Mitsuoka's lineup has everything from compact models resembling vintage British marques to the Orochi, a $100,000-plus "supercar." With its Le Seyde, Mitsuoka built perhaps the most garish car ever sold in Japan (, 4/7/08). "Mitsuokas are unique and I wanted a car no one else had," says Hajime Naito, 60, a photographer whose car collection includes a pimped-out $150,000 Orochi and $29,000 Zero-1—a two-seater roadster inspired by the Caterham Seven, a lightweight British sports car.

Appealing to Young Buyers

Susumu Mitsuoka founded the company in the 1960s in Toyama, 250 miles west of Tokyo, as a car repair center. In 1982, it started making 50cc microcars, which are even smaller than Japan's 660cc minicar (, 11/26/06). And a few years later Mitsuoka was designing its own full-size vehicles, using the chassis and engines from Toyota, Nissan, and Honda. In 1995, the Mitsuoka became the first new carmaker to be officially recognized by the Japanese government since Honda in 1963.

The Orochi, named after an eight-headed serpent, says a lot about Mitsuoka's quirky approach. Launched in 2006, it looks like a supercar but its 3.3-liter V6 engine generates just 233 hp—about half the horsepower of Nissan's GT-R supercar. The Orochi was born after Susumu Mitsuoka's wife challenged him to show something different as a concept car for the 2001 Tokyo Motor Show. Impressed by the designs, Mitsuoka executives put aside concerns over costs and decided to enter production in 2006. Today, if you want to buy an Orochi or its stripped-down $82,000 relative, Orochi Zero, prepare to wait six months for it to be delivered. "We want to provide cars which arouse young people's interest," says Akio Mitsuoka, who took over from his brother, company founder Susumu Mitsuoka, as president in 2004.

The $21,000 Viewt, a scaled-down version of a classic 1960s Jaguar Mk II, was a hit with young women after its launch in 1993. It uses the same engine and chassis found in a Nissan March subcompact, and it inspired copycat models from larger Japanese automakers. Daihatsu's Mira Gino, for example, was first introduced in 1999 and bears a resemblance to the original Mini.

Revving Up for Global Growth

But Mitsuoka hasn't forgotten its roots in 50cc microcars. In November, 2006, it began taking orders for the K-4, a new 50cc engine microcar with a limited production of just 220 vehicles. Weighing less than 400lbs, the $9,100 K-4 measures eight feet long and four feet wide and has a top speed of just under 30 mph. It sold out almost immediately, but Mitsuoka hasn't replaced it with a new model, citing concerns about low margins and tightening fuel emission rules for two-stroke 50cc engines. "Ultimately, I think the trend will be for small and safe cars. We'd like to release new small cars in the future," says Chairman Susumu Mitsuoka.

Mitsuoka does have one thing in common with Japan's giant automakers: It's revving up for global growth. With car sales sluggish, even the most successful automakers find Japan a tough sell (, 3/17/08). At Mitsuoka, sales in 2007 were flat at about $300 million, including revenues from its import dealership business. Mitsuoka doesn't disclose its earnings, although it says it has made a profit every year except 2004, when rising development costs briefly pushed the company into the red.

Emerging Asian and oil-rich Middle Eastern countries could provide welcome sales growth. In 2007, Mitsuoka struck agreements to sell its cars in Malaysia, Singapore, Hong Kong, and the United Arab Emirates. This year it hopes to ink deals in South Korea, Qatar, Saudi Arabia, and Jordan, adding 20 new markets by the end of 2009. President Akio Mitsuoka says that key to the company's success will be the Orochi, which could pave the way for sales of other models. "It's important we have our original car compete in the world market," he says.

Tashiro is a correspondent for BusinessWeek based in Tokyo. Rowley is a correspondent in BusinessWeek's Tokyo bureau.

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