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E N V I R O N M E N T A L S U S T A I N A B I L I T Y R E P O R T 2 0 0 4

Corporate Profile (March 31, 2004)

Company name

Establishment

April 22, 1970

MITSUBISHI MOTORS CORPORATION

2-16-4, Konan, Minato-ku, Tokyo108-8410, JapanTEL : +81-3-6719-2111

1) To develop, design, manufacture, assemble, sell or purchase, export and import and otherwise deal in motor vehicles and components thereof and replacement parts and accessories thereof.

2) To develop, design, manufacture, assemble, sell or purchase, export and import and otherwise deal in agricultural machinery and industrial engines, etc., and components thereof and replacement parts and accessories thereof.

3) To sell or purchase used motor vehicles and components thereof and replacement parts and accessories thereof.

4) To sell test-machines, meters, gauges, etc.

5) To carry out an agent’s business of non-life insurance and insurance conforming to the Automobile Accident Compensation Security Act.

6) To carry out financial services.

7) To carry out any business incidental or relating to any of the foregoing.

*Note : See p.40 for Outline of Business Performance

http: // www.mitsubishi -motors.com

Business

Asset

Homepage address

Head office

Web

SeeWeb Please visit our website for more information. Where indicated, please also refer to related pages in this report.

252,201 million

R&D Centers

Tokachi Proving Ground

Kyoto region

Okazaki region Okazaki City, Aichi

Kyoto City, Kyoto

Production operations

Nagoya Plant

Mizushima PlantVehicle output

Powertrain Plant

Engine /

Transmission outputShiga

Mizushima

Okazaki City, Aichi

Kurashiki City,Okayama

Kyoto City, Kyoto

Kosei-cho, Koga-gun,Shiga

Kurashiki City,Okayama

Tokachi Proving Ground3

3

R&D Center (Kyoto)Powertrain Plant (Kyoto)

2

R&D Center (Okazaki)Nagoya Plant

1

1

5

Head Office6

6

Mizushima PlantPowertrain Plant (Mizushima)

4

2

Powertrain Plant (Shiga)5

4

1

2

Otofuke-cho,Kato-gun, Hokkaido

3

1

4

2

5

4

R&D Centers and Production Operation

(June 29, 2004)

Related informationMitsubishi Motors Corporation‘s ”Environment”

http://www.mitsubishi-motors.com/corporate/environment/e/

List of offices / major affiliatesEnvironmental data by plant

http://www.mitsubishi-motors.com/corporate/environment/report/e/

CONTENTS

Executive Messages

Environmental Topics in 2004

Business Policy

Business Policy

Environmental Activities - Environmental Management

Environmental Guidelines

Organizational Structure

Environmental Sustainability Plan

Measures by Affiliates

ISO 14001 Compliance / Environmental Auditing

Emergency Measures and Environmental Incidents, etc.

Communication

Internal Education and Personal Improvement

Environmental Accounting

Environmental Activities - Measures to Reduce Environmental Impact

Environmental Impact of Vehicle Lifecycle

Research and Development

Procurement

Production

Logistics

Sales / Use of Products

Recycling

Others

Social and Economic Activities

Business ethics

Relations with Customers

Safety and Quality

Welfare Vehicles / Relations with Local Communities

Employee-Related Activities

Outline of Performance in FY 2003

Appendix

History of Environmental Activities

Questionnaire

p.2

p.3

p.4

p.6

p.7

p.8

p.10

p.14

p.14

p.15

p.16

p.16

p.18

p.19

p.27

p.28

p.34

p.36

p.38

p.41

p.42

p.44

p.46

p.47

p.48

p.49

p.50

Environmental Sustainability Report 2004The Environmental Sustainability Report is to assist thecompany’s stakeholders in better understanding itssocial and economic as well as environmental activities.In order to help make this report easier to read,

notes on terminology appear on the appropriate pages,and detailed data is available on MMC’s website. Reference : ”Environmental Reporting Guidelines (FY 2003 Version),”

Ministry of the Environment, Japan

Please also refer to the company’s brochure,annual report (business results) and fact and figures(corporate and managerial data).

CoverageEnvironment : Mitsubishi Motors Corporation (MMC)

in Japan- Includes environmental efforts by some MMC’s affiliates

MMC’s environmental activities to preserve the environment are explained according to business activity.Society : Mitsubishi Motors Corporation in JapanEconomy : Consolidation of financial accounting

PeriodFY 2003 (April 1, 2003 – March 31, 2004)- Selected information after April 2004 has been added.

Web

Web

1

2

Mitsubishi Motors Corporation affirms the responsibilityit feels as a member of society to contribute to itsbetterment and to protect and enhance the globalenvironment through development of environmentallyharmonized technology.

Environmental protection requires constant effortregardless of the size of a company or the state of itsbusiness. As an automobile manufacturer, MMC bears aspecial responsibility for minimizing the consumption ofresources and effects on the environment not only of itsproduction processes, but of its products themselves. As agood corporate citizen, MMC must, and will, continue itsenvironmental initiatives and remain faithful to itscommitments.

Since creating its Environmental Council in 1993, MMChas steadily improved its environmental managementsystems. Since 2002 it has made unified, company-wideefforts to promote recycling, combat global warming andprevent pollution, comprehensively integrating thoseefforts into a medium-term action plan called ”MMC‘sEnvironmental Sustainability Plan.” In this ”EnvironmentalSustainability Report 2004,” activities in FY 2003, primarilyenvironmental activities, are presented.

In FY 2003, not only did we continue to lower exhaustemissions and increase fuel efficiency; we moved furtherahead toward the practical use of other exciting state-of-the-art technologies. We began tests on public roads ofour ”MFCV” fuel cell vehicle and unveiled our concept testcar ”i,” a platform that is already demonstrating superiorenvironmental performance. This report outlines, as well,activities in areas not strictly environmental, but which areequally part of our duties as a corporate citizen : businessethics, relations with customers and local communities,employee-related activities, safety and product quality.

In this manner, and in these regular reports on itsactivities, Mitsubishi Motors Corporation‘s aim is tocontinually improve itself, responding to comments andcriticisms, thus to be a company worthy of your trust.

Our company issued a medium-term action plan called”MMC‘s Environmental Sustainability Plan” in FY 2002,based on which a variety of environmental measures arecarried out.In the sustainability plan, MMC identifies items and sets

specific targets for activities in the areas of environmentalmanagement, recycling, combating global warming, andpreventing environmental pollution. Carefully monitoringtrends in governmental policy and actions in relatedindustries, MMC further reviews its items and targets asnecessary, and assesses progress quarterly. We endeavor toachieve a constant upward spiral of progress via thePDCA cycle : Plan Do Check Action.Such progress on the items and targets in the sustainability

plan so far includes the following :Creating mechanisms for developing and designing vehiclesfriendly to the environment ;

Building efficient, uniform systems for reducing environmental

substances contained in vehicles ;

Calling on all of MMC‘s suppliers to obtain ISO 14001 certification

by the end of FY 2004 ;

Preparing to comply with the Automobile Recycling Law in Japan,

in a manner that maintains the company‘s competitiveness

as well as reduces the burden on customers as much as possible ;

Increasing the proportion of LEVs and vehicles subject to

preferential tax treatment ;

Testing fuel cell vehicles on public roads through participation

in the Japan Hydrogen Fuel Cell Demonstration Project (JHFC) ; and

Controlling VOC emissions through a shift to waterborne paints

on body painting lines.

Most of the measures listed above continue to require ouractive attention, and we have started FY 2004 with a partialreview of the sustainability plan, seeking ways to furtherimprove them. Toward realized development of next-generation clean energy vehicles, MMC will study the variousoptions and the prospects for bringing them to market,continuing the technological evolution of fuel cell vehicles.We hope this Environmental Sustainability Report will serve

to acquaint you with, or bring you up to date on, ourenvironmental efforts and commitments.

Yoichiro OkazakiChairman of the BoardChief Executive OfficerMitsubishi Motors Corporation

Hiroshi HarunariEnvironmental Executive OfficerCorporate General ManagerBusiness Development OfficeMitsubishi Motors Corporation

Executive Messages

3

Environmental Topics in 2004

Mitsubishi Fuel Cell Vehicle ”MFCV” Certified by MLIT

DeodorizingInterior Materials

p.24

The MITSUBISHI FCV was certified by the Ministry of Land, Infrastructure and Transport (MLIT) in the category ofthree-row-seating minivan – the first fuel-cell vehicle in that category in Japan.MMC is part of Ministry of Economy, Trade andIndustry‘s Japan Hydrogen Fuel Cell DemonstrationProject (JHFC), and its FCVs were used as escort carsduring the Osaka International Ladies Marathonin January 2004. That experience served as avaluable running test on public roads and allowedaccumulation of data and confirmation oftechnology toward commercial production of the FCV.MMC‘s ”Vehicle Home Page” carries FCV driving andperformance data in real time.

Deodorizing roof liners – a first in the automobileindustry – were introduced in the new Grandis.The liners absorb chemical substances, such as cigarettesmoke, human odors and formaldehyde fumes, andresolve them into water, carbon dioxide and otherproducts, creating more pleasant, safer interior spaceseven for families with small children.

By FY 2003, 86.7% of MMC‘smain suppliers had obtainedISO 14001 certification.MMC requires that its mainsuppliers disclose data onenvironmental substancescontained in products and goodsthey deliver.

Green Procurement LEVs Account for 95%of Sales in FY 2003

Environmental Concept Car

EnvironmentalCommunication

MMC publicizes its environmental activities in a pamphletfor schoolchildren: ”Cars and the Environment.” Employees also visit schools to teach environmental classes,and MMC maintains an environmental homepage andan information service, both for children. All are parts ofMMC‘s ongoing efforts to acquaint customers andthe public with its range of environmental activities.

p.15,16 & 45p.23

p.27p.22 & 36

p.22 (p.5)

Alreadyacquired86.7%

Will have acquiredby FY 200412.6%

State of ISO 14001 complianceof main suppliers (FY 2003) Concept Test Car ”i”

Others 0.7%

”Cars and the Environment”(Japanese version)

MINICA ”U-LEV”

Cigarettesmells

HumanodorsChemical

fumes

Carbondioxide

Water

Absorbing andresolving

The Grandis gained U-LEVcertification, and 95% of thegasoline vehicles sold in FY 2003were qualified as LEVs.

In FY 2003, MMC participatedin various international motorshows with its concept car ”i,”a platform for further improvingenvironmental performance(reducing fuel consumption andexhaust emissions).

Changes in the Business EnvironmentWhile cuts in variable and fixed costs havebeen achieved as initially targeted underour medium-term “Turnaround” businessplan launched in fiscal 2001, factors suchas problems with sales finance in the U.S.have resulted in us falling far short of ouroperating profit margin target. Significantdamage to customers and society’s trustin MMC was also caused by the problemof past recalls.In response to these difficulties, a

business revival plan was adopted in May2004 in order to reconstruct ouroperations with the help of threecompanies in the Mitsubishi Group. Thiswas augmented by the addition of newmeasures in June, and these are nowbeing implemented as we push forwardin reforming our profit structure. Wehave also set about reforming MMC’scorporate culture by strengtheningcompliance. By tackling these challenges,we aim to rapidly restructure to recoverthe confidence of customers and societyand to transform ourselves into acompany that can contribute to society.

Business Policy

Business Policy

BusinessPolicy

4

Business Revival PlanMMC’s business revival plan isdesigned to transform MMC’smanagement to restore trust in thecompany and achieve a self-sustainable recovery. “Compliancefirst“ has in addition been adopted asan overriding principle of reform,which, coupled with putting “safetyfirst“ and “customer first“, will guideour reconstruction and reform efforts ( p.42).

The key elements of our businessrevival plan are as follows :1. Recovery of trust through

management reform and resolute reconstruction

2. Radical reform of profit structure3. Product strategy for growth4. Regional strategy for growth5. Alliance with DaimlerChrysler6. Performance targets7. Financial targets

Grandis (launched in May 2003)

*High fuel efficiency MIVEC engine, Ultra-LEV (U-LEV) certified, and fitted with odor-absorbing interior

( p.21-23).See

See

In addition to the above, additionalmeasures for attaining targets set by thebusiness revival plan were unveiled onJune 16 to counter the risk of downwardpressure on sales stemming from recall-associated problems and otherdifficulties. Emphasizing cost cuts withno “sacred cows“, winning backcustomer trust, and strict compliance, weare implementing these measures toavert this risk.Business Revival Plan

http://media.mitsubishi-motors.com/pressrelease/j/corporate/detail1049.html

Additional Measureshttp://media.mitsubishi-motors.com/pressrelease/j/corporate/detail1064.html

5

Business Policy ENVIRONMENTAL SUSTAINABIL ITY REPORT 2004

Principles of Social and Environmental Activities

Guided by an awareness of ourresponsibilities as a member of society,we see our mission as being tocontribute to the development of societyand improvement of the globalenvironment, and seek to developenvironmentally friendly technologies toachieve this mission.In line with this philosophy, we have

sought to be an automaker that has avital environmental contribution tomake-to people, to society, and to theworld-and we will continue to follow thisapproach in our social andenvironmental activities in fiscal 2004.

Web

Web

The structure of a rejuvenated MitsubishiMotors also took form at a generalmeeting of shareholders on June 29, andplans adopted to date will beimplemented speedily and without fuss.

Eclipse Concept -E (Exhibited at the Detroit Motor Show, Jan.2004)

*A concept car using the hybrid E-BOOST system offers improved fuel efficiency, lower emissions and better acceleration

http://media.mitsubishi-motors.com/pressrelease/j/motorshow/detail958.html

Web





ISO 14001 Compliance

Environmental Auditing

Emergency Measures andEnvironmental Incidents, etc.

Communication

Education and Personal Improvement


EnvironmentalActivitiesEnvironmentalManagement

The company’s business policies embracesymbiosis with society and the basicprinciples of protecting and improving theenvironment based on the company’sEnvironmental Guidelines(see below) issued in 1999. They declare environmental protection a

priority, and our commitment to thecontinuous efforts necessary to achieve it(basic guidelines). They state that we willact proactively in both management andactual performance (behavioral standards).In order to reflect the guidelines in all of

our products and services, MMC hascreated its “Environmental SustainabilityPlan” ( p.8-9) through which specificenvironmental activities are carried out.


Business policy

Concrete action plan

Policy on environmental protection



Principles for social andenvironmental activities

MMC ENVIRONMENTAL GUIDELINES

Basic PolicyMMC recognize that protection of the global environment is a priority forhumankind and as such makes the following pledge :(1) From a global viewpoint, we are committed to continual reduction of

negative environmental impact of our corporate activities with all our strength, these including development, procurement, production, sales, and after-sale servicing activities related to automobiles.

(2) As a good corporate citizen, we are committed to action to protect the environment at the level of local communities and society as a whole.

Behavioral Standards(1) We will endeavor to protect the environment by forecasting and assessing

the environmental impact of our products at all stages in their life cycle.Priority is given to the following areas :

Prevention of global warming by reducing emissions of greenhouse gasesPrevention of pollution by restricting emissions of substances harmful to the environmentReduction of waste and maximizing efficient use of resources by promoting conservation of resources and recycling.

(2) We will endeavor to improve our environment management practices as part of ongoing efforts to ameliorate the environment.

(3) We will comply with environment regulations and agreements, and will work toprotect the environment by establishing voluntary management targets.

(4) We will encourage our affiliates and suppliers, both in Japan and overseas, to cooperate in working to protect the environment.

(5) We will actively disclose environment-related information and will seek the understanding of local communities and of society at large.

Issued in August 1999

See

6

Environmental Management


Dedicated Environmental Organization : Environment & Recycling Affairs Department

In May 1999, the Environmental AffairsDepartment was set up to take overallresponsibility for environmental activitiesthroughout the company.(The department’s staffing was increasedand it was renamed “The Environment &Recycling Affairs Department”).In November 2001, the post of

Environmental Officer was made a full-time position – the executive officer forenvironmental and recycling affairs. Thedepartment is responsible for strategiesfor environmental protection for theentire company, and the secretariat forthe Environmental Council.In order to speed compliance with

recycling legislation in Japan andoverseas, a Recycling Promotion Officewas established in March 2002.

Environmental CouncilMMC’s commitment to environmentalprotection in every facet of its operationswas bolstered in 1993 when itsEnvironmental Council, chaired by theCEO, was formed.The council meets generally once a year

to determine basic corporate policies onmeasures to protect the environment,and to consider and decide questionsbrought by its three committees –Products, Production and EnvironmentalManagement / Recycling – as shownbelow. In August 2001, the AutomobileRecycling Law Task Force was set up tocoordinate MMC’s response to the End-of-Life Vehicle Recycling Law (hereinafterreferred to as the “Automobile RecyclingLaw”).

In FY 2003, a Production EngineeringSubcommittee was created under theProduction Committee to respond tonew environmental issues and developtechnology to reduce environmentalimpact. The Kyoto Subcommittee wasrenamed the Powetrain Subcommitteeand a domestic affiliate, PajeroManufacturing Co. (hereinafter referredto as “PMC”), became a member of theProduction Committee. The fivesubcommittees under the ProductionCommittee cooperate in carrying outspecific activities to reduce adverseenvironmental effects.A meeting of the Environmental

Council in 2003 recognized the results ofactivities in FY 2003 under theEnvironmental Sustainability Plan( p.8-9), and reviewed the futureactivity plan in light of 2003 results andchanges in social trends.

EnvironmentalCouncil

DfE (Design for Environment) Green procurement Support for introduction of environmental management systems by dealers Environmental education / Personal Improvement Disclosure of environmental information Promotion of vehicle recycling

Chairman : CEOSecretariat : Environment & Recycling Affairs Department

Production CommitteeProduct CommitteeEnvironmental Management /Recycling Committee

MizushimaSubcommittee

PMCSubcommittee

PowertrainSubcommittee

ProductionEngineeringSubcommittee

Protection of plant environment Prevention of global warming via production and logistics Reduction of waste emissions and improved resource conservation at production stage Reduction of use of environment-impacting substances at production stage

Improvement of vehicle fuel efficiency Prevention of global warming by reducing use of air conditioning refrigerant Improvement of transport environment through use of ITS*1 technology Reduction of vehicle exhaust emissions Development and propagation of low emission vehicles, etc.

NagoyaSubcommittee

Automobile RecyclingLaw Task Force

Notes

*1: ITS (Intelligent Transport Systems)

7

Environmental Activities - Environmental Management ENVIRONMENTAL SUSTAINABIL ITY REPORT 2004

See


8


Category Item Midterm Target

(1) Environmental management

(2) Recycling

DfE(Design for Environment) Application of DfE Pursuit of implementation of DfE process

Promotion of acquisition of ISO 14001 certification Promotion of acquisition of ISO 14001 certification by all suppliers (by end FY 2004)Cooperation with suppliers(green procurement)

Support for introduction of environmentalmanagement systems by dealers Establishment and operation of environmental management systems by all dealersCooperation with dealers

Promotion of acquisition of ISO 14001 certification

Cooperation with domestic production affiliates

Expansion of the acquisition of ISO 14001 certification at domestic and overseas plants, and promotion of the environmental activities as well as MMC which had acquired it at all plants in Japan

Enhancement of “Environmental Sustainability Plan” and promotion of the certain action by MMC Group Plant Environment Liaison Council (twice a year)

Cooperation with overseas production affiliates

Regular monitoring of state of compliance with official regulations and regulatory trends (twice a year) Action to protect the environment in accordance with the demands of societies in host countries Strengthening of collaboration on environmental and recycling issue at International Production Conference with major affiliates

Collaboration withdomestic andoverseas productionaffiliates

Disclosure of environmental information Regular publication and improvement of environmental reports Improved disclosure of information via the InternetDisclosure

Promotion of vehiclerecycling

Compliance with Japanese andEU legislation on vehiclerecycling / improvement ofrecyclability / reduction of use ofenvironment-impactingsubstances

Activities for achieving 95% recycling rate Active involvement in development of recycling systems through collaboration with central and local governments and other related entities Development of network for collection of End-of-life vehicle (ELV)s through collaboration with related companies such as DaimlerChrysler in the EU Promotion of easily recyclable products (Development of recyclable materials, design of easily recyclable constructions, expansion of use of recycled materials) Reduced use of hazardous substances (lead, mercury, hexavalent chromium, cadmium, etc.)

Zero emissions of landfill waste

Promotion of recycling

Reduction of emissions of byproducts

Effective use of water resources

Maintenance of zero emissions of landfill waste at all plants (achieved in FY 2001)Reduction of wasteemissions andimproved resourceconservationat production stage Reduction of water use through greater recycling, etc.

Reduction of metal scrap and waste casting sand

At least 98% recycling of waste (by end FY 2005)

Compliance with new domestic fuel economy standards

Reduction of use of HFC134a

Promotion of development HFC134a-free air conditioners

Reduction of emissions of CO2

(energy conservation at plants)

Reduction of CO2 emissions at logistics stage

Reduction of packaging and packing materials

Improvement of transport environmentthrough use of ITS technology

Attainment of self-targets for EU fuel economy

Early attainment of new domestic fuel economy standards for 2010 (by FY 2005)

Steady action to achieve self-targets for EU fuel economy in 2009

Expansion of use of air conditioning systems using less refrigerant

Promotion of development of CO2 refrigerant (jointly with airconditioning equipment manufacturers)

Reduction of CO2 emissions by at least 20% compared with FY 1990 (by end FY 2010)

Reduction of CO2 emissions per unit shipped by at least 6% compared with FY 2000 by improving transportation efficiency (by end FY 2005)

Reduction by at least 15% compared with FY 2000 in use of wooden cases per knockdown unit sold (by end FY 2005)

Promotion of R&D and diffusion of ITS in-car equipment

Continuation of research and application of technologies with DaimlerChrysler Participation in Japan Hydrogen & Fuel Cell demonstration Project (JHFC) subsidized by Ministry of Economy, Trade and Industry (METI)

Development and launch of compressed natural gas vehicles (CNGVs) and hybrid electric vehicles (HEVs)

Timely release of vehicles compliant with exhaust emission regulations

Reduction of VOC use on passenger car paint lines to 35g/m2 or less through adoption of waterborne paints (by end 2007)

Maintenance of dioxin emissions from waste incinerators at the level of 10% or less of allowed limit

At least 85% of domestically registered vehicle sales from FY 2005 to be LEVs approved for government use (high fuel economy + U-LEVs) At least 80% of domestically registered vehicle sales from FY 2003 to be Green Purchasing Law compliant At least 70% of domestically registered minicar sales from FY 2005 to be LEVs approved for government use (high fuel economy + U-LEVs)

Improvement ofvehicle fuel economy

Reduction of use of airconditioner refrigerant

Production andlogistics

Improvement oftraffic flow

Promotion of R&D on fuel cell vehicles (FCVs)

Development andpropagation of lowemission vehicles,etc.

Market launch of clean energy vehicles

Reduction of use ofenvironment-impactingsubstances at productionstage

Expansion of vehicles achievingboth high fuel economy and low emission

Compliance with Japanese and overseasexhaust emission regulations

Reduction of VOC emissions

Reduction of dioxin emissions

(4) Prevention of environmental pollution

(3) Prevention of global warming

1

2

3




8

Environmental Sustainability PlanMMC is pursuing environmental protectionin accordance with a five-year medium-term environmental action plan beginningin FY 2002 called the EnvironmentalSustainability Plan.The plan sets concrete targets in four

fields--environmental management,recycling, prevention of global warming,and prevention of environmental pollution--and specifies as far as possible the meansand timescale for their attainment.

Environmental Performance in FY 2003The MMC Environmental Council( p.7) reviews the results of activitiesbased on the Environmental SustainabilityPlan.In FY 2003, environmental activities met

their overall objectives with the exception ofthe item “Expansion of vehicles achieving bothhigh fuel efficiency and low emission”. MMChad intended for 80% or more of all modelsregistered and sold domestically in FY 2003to meet the Green Purchasing Law, but thefinal figure was 78%. At the moment, MMCis determining new target levels consistentwith the low-emission vehicle (LEV) certificationprogram ( p.22) introduced inOctober 2003 and a new tax reductionsystem for automobiles*4 applied since FY2004, as well as MMC’s business revivalplan created this May ( p.4).In the item “Reduction of CO2 emissions

at logistics stage”, MMC revised its targetfor reduction to 6% below the level of 2000due to the spinning off of Mitsubishi FusoTruck and Bus Corporation (MFTBC).

(1) Environmental management

(2) Recycling

(4) Prevention of environmental pollution

(3) Prevention of global warming

Performance in FY 2003 Assessment Relatedpage




Preparing for the application such as improving the LCA database

86.7% acquisition rate achieved (352 of 406 *1 suppliers)

Issuing declarations for environmental activities by all dealers and building systems for their implementation

Three domestic affiliates and five overseas affiliates obtained ISO 14001 certification.

The Mitsubishi Motors Group Environmental Liaison Council met twice, in September and December.

Linkages strengthened through follow-ups twice a year.

Continuing efforts for zero emission of landfill waste

Resource recovery rate : 99.5%

Emissions to sales : 0.7% increases from the level of FY 2001

Decrease of 8.1% from the previous year

Simultaneous release in English and Japanese in July 2003 MMC website completely updated in October 2003

Japan : Cooperated in various preparatory efforts including dispatching personnel to JAMA and other organizations, and establishing a system for depositing recycling fees EU : Developing networks and compliance systems for each country Launched new model (Grandis) according to recyclable design guidelines and “quality gate” assessment Japan : Successfully reduced use of lead in new model (Grandis) to less than one-fifth the industry’s 1996 average. EU : Marketed vehicles in conformity with laws

Launched Grandis /eK-CLASSY (all version achieved the standard) and eK-WAGON /Minica achieving the standard

Developed fuel-efficient technologies including powertrains (MIVEC engines and transmissions)

Use in new model (Grandis)

Joint development with airconditioning equipment manufacturers

Reduction of 24% from FY 1990

Reduction of 4.5% from FY 2000

Reduction of 21% from FY 2000

Employed ETC and navigation system in Grandis etc. and promoted development of additional ITS functions

Produced a fuel cell vehicle, the “MITSUBISHI FCV” - Grandis-based, served as escort vehicles for the Osaka International Women’s Marathon in 2004 Participated in JHFC Project from FY 2003, and began road tests of MITSUBISHI FCV

Total sales of CNG vehicles in 2003 : 234 units

Ongoing adoption of waterborne paints (plans to start mass production in August 2004)

Emissions maintained at less than one-tenth the limit

Japan : Launched models including Grandis, Colt and Lancer, achieving new long-term exhaust emission regulations (2005 regulations) Overseas : Launched Galant (PZEV*2) in conformity with California ZEV regulations*3

68.6% proportion of LEVs approved for government use

78.0% proportion of vehicles covered by Green Purchasing Law

37.0% proportion of LEVs approved for government use (mini-cars)

p.19

p.27

p.37

p.14

p.11

p.12-13

p.15

p.38-39

p.30

p.25

p.26

p.30

p.30-31

p.33

p.20-21

p.20-21

p.21

p.21

p.28-29

p.34-35

p.35

p.41

p.24

p.23,36

p.20,22,36

p.22

p.32

p.32

: Achieved or made good progress

: Delayed, but with enough time to catch up

: Not achieved

*1: The total number of suppliers was revised due

*1: to the spinning off of Mitsubishi Fuso Truck and

*1: Bus Corporation (MFTBC).

*2: At least 10% of 2005 models sold in

*1: California must be ZEV (Zero Emission Vehicles).

*3: Partial Zero Emission Vehicle (PZEV). These are

*1: certified as clean gasoline vehicles under ZEV

*1: regulations. Five PZEV’s are counted as one ZEV.

*4: The most significant changes in FY 2004 were

*1: the tax deduction of annual vehicle taxes and

*1: vehicle acquisition taxes for vehicles; (1) achieving

*1: the new 4-star LEV and exceeding 2010 fuel

*1: efficiency standards by 5% ( p.20),

*1: (2) achieving the new 4-star LEV and exceeding

*1: 2010 fuel economy standards, or (3) achieving

*1: the new 3-star rating and exceeding 2010 fuel

*1: economy standards by 5%.

Notes

9


See

See

See

See



The MMC group of companiesThe MMC group of companies comprises118 subsidiaries, 31 affiliates andone other associate (as at 31 March2004), and is engaged in thedevelopment, production and sales ofpassenger cars and parts for those cars.

Sharing Best Practices among Plants

MMC has identified the bestenvironmental practices at each of itsplants since June 2003 and is continuallyworking to standardize and improvepractices at all plants, both in Japan andoverseas.

(Overseas) MMC’smain affiliates Business

Mitsubishi MotorsNorth America, Inc.(MMNA)

Netherlands Car B.V.(NedCar)

Mitsubishi MotorsEurope B.V. (MME)

Mitsubishi MotorsAustralia Limited(MMAL)

Mitsubishi Motors(Thailand) Co., Ltd.(MMTh)

Production Sales(North America)

Production (Europe)

Sales (Europe)

Production Sales(Australia)

Production Sales(Thailand)

MMPC(Philippines)

MMAL (Australia)

ATC(Philippines)

MMNA (USA)

MMTh (Thailand)

NedCar (Netherlands)

(Domestic) MMC’smain affiliates Business

Mitsubishi AutomotiveEngineering Co., Ltd

Pajero ManufacturingCo., Ltd (PMC)

Mitsubishi AutomotiveLogistics Co., Ltd.

Tokyo Mitsubishi MotorSales Co., Ltd, etc.

Mitsubishi AutomotiveTechno-Service Co., Ltd.

Tokyo MitsubishiAutomotive PartsSales Co., Ltd, etc.

Portion of productdevelopment

Production of Pajeroand others

Domestic transportof product

Sales of passengercars / parts

Portion of new-carinspections andmaintenance

Domestic salesof repair parts

Pajero Manufacturing Co., Ltd. Mitsubishi Automotive Bus Manufacturing Co., Ltd.

Production (Japan)

Mitsubishi Automotive Logistics Co., Ltd. Mitsubishi Automotive Techno-Service Co., Ltd, etc.

Logistics & other services

Mitsubishi Automotive Engineering Co., Ltd.

Engineering

DaimlerChrysler AG.

Other related companies

Tokyo Mitsubishi Motor Sales Tokyo Mitsubishi Auto Parts, etc.

Sales (Japan)

Mitsubishi Motors North America, Inc. Mitsubishi Motors Europe B.V. Netherlands Car B.V. Mitsubishi Motors Australia Ltd. Mitsubishi Motors (Thailand) Co., Ltd, etc.

Overseas production & sales

Auto finance

Mitsubishi Auto Credit & Lease Corporation (Japan)Mitsubishi Motors Credit of America, Inc (U.S.)

Finished and semi-finishedautos and partsServices, etc.

:Consolidated subsidiary

:Equity method affiliate

Mitsubishi Motors Corporation

Customers

Improvement

Implementation

Training

Status review

Operating model

MMC best practices

10

Best environmental practices at fourdomestic plants (3 MMC plants andPMC) and four overseas plants (NedCar,MMNA, MMAL and MMTh) relate to:

Management of industrial waste

Conservation of energy

Contributions to local communities

Details are shared among the eightplants for further improvement, withuseful ideas reviewed and implemented. Main Plants Overseas

Collaboration with Domestic AffiliatesAs a member of MMC’s ProductionCommittee, Pajero Manufacturing Co.,Ltd. (PMC Subcommittee), a majoraffiliate, actively exchanges informationwith MMC’s manufacturing plants andpromotes environmental activities.( p.7 & 28) Other production affiliates meet twice a

year at the Mitsubishi Motors GroupPlant Environment Liaison Council. Inconjunction with the spin-off ofMitsubishi Fuso Truck and BusCorporation (MFTBC) in January 2003,the liaison council was reorganized intothree affiliates – MizushimaIndustries,Ltd., Ryowa Sheet Metal

Processing Co.,Ltd.*, and Suiryo PlasticsCo., Ltd. In 2003, the liaison council mettwice, in September and December, toshare information on technical problemsin environmental man.The newsletter entitled “Plant

Environment Topics” is published twice ayear for distribution to 69 suppliers tokeep them abreast of legislativedevelopments and other trends.MMC will continue to collaborate with

Mitsubishi Fuso Truck and BusCorporation (MFTBC) on issues they facein common.

*On March 31, 2004, the company was soldto Futaba Industrial Co., Ltd. Plant Environment Topics

Pajero Manufacturing Co., Ltd. http://www.pajero.co.jpWeb

1000

800

600

400

200

0

10

8

6

4

2

0

(%)

1998 1999 2000 2001 2002 2003

Waste disposedof in landfillsDisposal rate

(tons/year)

(FY)

Waste Disposed of in Landfills

Establishment 1943 Began total production of Pajero in 1982

Capitalization

Location

Employees

Business

Ground /building areas

Productionprocesses

Wholly owned subsidiary 1,460

Kamo-gun, Gifu Prefecture Production of Pajero, metal moldsand sheet metal

189,200/108,800m2Pressing, welding, paintingand assembly

PMC Environmental Report

Environmental MeasuresPajero Manufacturing Co., Ltd.(hereinafter referred to as “PMC”)obtained ISO 14001 certification in July1999 as part of its environmentalprotection efforts, and issued a medium-term environmental action plan based onMMC’s Environmental Sustainability Plan.PMC tackles the challenge of reducing

environmental impact at each ofworksites, with initiatives taken by itsEnvironmental Council, consisting of theEnvironmental Protection Committeeand the Energy Conservation Committee.PMC is recognized by Gifu Prefecture as

a “plant friendly to the environment.”

Zero EmissionsThough thorough sorting and increasedrecycling of waste from factories andoffices, and reduced production defects,PMC achieved zero waste disposed of inlandfills in the latter half of FY 2003.

Energy ConservationMaking steady efforts to reduce CO2

emissions from production processes,PMC expects to achieve a 9% reductionby FY 2010 from the level of FY 2001.

Chemical SubstancesPrior to enactment of relevant laws, PMCwas a participant in Gifu Prefecture’sPRTR Pilot Project, started in FY 1998, togather information on the emission andmovement of chemical substances in theenvironment.

Activities in Local CommunitiesPMC is active in the local community,meeting regularly with neighborhoodassociations, instructing school childrenon traffic safety, and agreeing withfacilities for the elderly on assistance fordisaster relief. “Family festivals” havemobilized communities annually for twentyyears and have become increasinglyinternational, with local Japanese andgrowing numbers of foreign residentsgathering to enjoy themselves together.


11

See

Collaboration with Overseas PlantsThe Production Committee of theEnvironmental Council conducts

Energy useEnvironmental standards and emissionsEstablishment of specific facilitiesWaste disposalLogistics-related mattersLaws and regulationsState of ISO 14001 compliance

Information on overseas plants surveyedregular follow-up surveys of the state ofenvironmental protection at the mainplants overseas twice a year.

Environmental ProfileIn 1999, NedCar received the ISO 14001certification and EMAS : EcoManagement and Audit Schemeregistration, setting high demands forthe accuracy of numerical data, andactive communication.NedCar has published the

Environmental Annual Report annually since 1998.

Water consumptionReduction of the use of water forindustrial processes of 4.3 m3/car (1991)to 1.0m3/car in 2003 was realized by :

New pretreatment

Closed cooling water system

Process Control

Good Housekeeping

Environmental ProfileMMNA has been granted multiple permitsfrom environmental regulatory agencies,including the Illinois EnvironmentalProtection Agency (IEPA), the U.S. Environmental Protection Agency (EPA),

and the Bloomington and Normal WaterReclamation District (BNWRD). Thosepermits explicitly detail the amount andtypes of materials allowed to emit.In 2001, MMNA was certified ISO 14001.

Minimizing wasteMMNA has taken a number of voluntarysteps that go beyond legal and regulatoryrequirements, and have successfullyreduced the impact on the environment:

Community InvolvementReceived Recycling and Waste

Reduction Awards

“Illinois Prairie Project”, returned 3.9

acres of the manufacturing site to its

natural state (in partnership with the

Illinois Department of Natural Resources)

Financial support to student interns since 1999


Established 1991 (Beginning of Mitsubishi Motors investment. Plant operation started in 1968.)

Location

Employees

Site /Floor Area

ProductionVolumeLine of

business

Born, The Netherlands 910,000 / 350,000 sq. meters

4,200 182,368 units*

Manufacture(*Includes Volvo badges vehicles)

Established 1988

Location

Employees

Site /Floor AreaProductionVolume

Normal, Illinois, U.S.A 2,570, 000 / 190,000 sq. meters

3,300 204,233 units

Manufacture (Stamping, Plastics, Body, Paint and Trim / Final Assembly), MarketingLine ofbusiness

Air emissions

Lb. / vehicle

Waste to landfill

Lb. / vehicle

11.01

11.09

9.14

1998

1999

2000

2001

2002

8.66

8.63

31.24

26.19

17.37

16.92

16.09

Netherlands Car B.V (NedCar) http://www.nedcar.nl

Mitsubishi Motors North America, Inc. (MMNA) http://www.mitsubishicars.com

Environmental Annual Report 2002

Environmental White Paper

18

16

14

12

10

8

6

4

2

0

Emis

sio

n

19931981 1998 2003

Emission Hydrocarbons

RealPermit

(kg/Car)

(Year)

Hydrocarbon emissionHydrocarbon emission was reduced by various controls such as use of afterburners and water based paints.

12

Web

Web

Environmental ProfileMMAL sign up with the Greenhouse GasChallenge, an agreement with theGovernment.In 2003, achieving ISO 14001

certification with that employeeawareness was improved.

NPI ReportMMAL submits a NPI : National PollutantsInventory report annually to theGovernment. This involves reporting theuse of 90 chemicals and other energyrelated data being emitted to the air,land and water to provide thecommunity, industry and thegovernment. The main objectives of the NPI are to:Provide information to industry and

government to assist in environmental

planning and management

Satisfy community demand for accessible

information on emissions to the

environment

Promote waste minimization,

cleaner production, and energy and

resource savings.

RecyclingMMAL Tonsley recycles over 6,000 tonesof scrap sheet metal by sending them tothe Lonsdale Foundry, where the enginesare cast. Several hundred thousand litersof waste paint solvent is also recycledannually.MMAL Lonsdale recycles machine tool

coolant and reuses it. Also, recyclethrough vendors waste timber,cardboard and solvent.

Social communicationMMAL Lonsdale is with a group ofcompanies in the local district, whichmeet under the guidance of the localmunicipal council to promote sustainableindustry.

‘Protect People, Save the Earth’In 1999, MMTh was certified ISO 14001.Environmental education program:

‘Protect People, Save the Earth’ wasestablished in 1992 under cooperationwith Ramkhamhaeng University. About95,000 youth throughout the countryhave involved, and 1,140 small projectsfor environment and community haveimplemented. For example, establishingenvironmentaI

education and training centers atnational park is one of the achievements.

Social contributionMMTh is planning to donate old PC setsfor school in rural areas for reasonsbelow.

Response to the project of Ministry

of Information & Communication

Technology (ICT)

Improve communication in rural

areas, access to legal and regulation

information, research and

technology, electronic waste

management

Mitsubishi Motors Australia, Ltd. (MMAL) http://www.mitsubishi-motors.com.au

Established 1980 (Beginning of Mitsubishi Motors investment. Plant operation started in 1916.)

Location

Employees

Site / Floor Area

Production Volume

Line of business

Adelaide, South Australia, Australia 916,000 / 230,602 sq. meters

3,347 46,191 units

Manufacture*, Marketing*Tonsley Plant: Stamping, Body, Paint Shop, Vehicle Assembly and Parts and Accessories Warehouse*Lonsdale Plant: Iron foundry, an aluminum die casting facility and machining and assembly lines

Mitsubishi Motors (Thailand) Co., Ltd. (MMTh) http://www.mitsubishi-motors.co.th

Established 1987 (Renamed from Mitsubishi Motors Corporation Sittipol Co., Ltd. (MSC) on November 21, 2003.)

Location

Employees

Site / Floor Area

Production Volume

Line of business

Phathumthanee, Thailand 430,400 / 79,800 sq. meters

2,952 104,832 units

Manufacture, Marketing

13


Web

Web


14

ISO 14001 Compliance / Environmental Auditing

ISO 14001 ComplianceAll of MMC’s domestic plants and majoraffiliates in and outside the country haveacquired ISO 14001 certification, theinternational standard for environmentalmanagement systems.

Emergency MeasuresWhile MMC strives constantly in itsproduction activities for safety andreduced environmental impact throughstable operations in line with its existingoperational and working standards, ithas established guidelines, as well, forconceivable emergency situations, andcarries out regular training exercises.

IncidentsIn FY 2003, there were no environmentalincidents.

ComplaintsThere were 14 complaints by residents inFY 2003. Most of them were concerned,for example, noises and smells. In suchcases, we strive to identify the cause soas to take appropriate countermeasures.In some cases, however, causalrelationships need to be investigated,and monitoring is continued through,among other things, regular patrols ofplant environments.( p.33)

Legal ActionA lower court ruling was handed downon October 29, 2002, in the so-calledTokyo Air Pollution Case, anenvironmental lawsuit concerningautomobile exhaust emissions, but hasbeen appealed. Meanwhile, three similarlawsuits are pending.

Environment-related RecallsOne of the recalls reported to theMinistry of Land, Infrastructure andTransport in FY 2003 were environmentrelated.MMC responded to malfunctions of the

Diesel Particulate Filter (DPF) on Delicamodels sold from December 8, 2003,through February 25, 2004, by replacingthe affected parts (total of 84 units).

Domestic

Domesticaffiliates

Overseasaffiliates

Nagoya Plant Nov. 1998 Powertrain Plant Nov. 1998 Mizushima Plant Dec. 1998

Pajero Manufacturing Co., Ltd. July 1999 Mitsubishi Automotive Engineering Co., Ltd. Feb. 2000 Mizushima Industries Co., Ltd. Oct. 2001 Suiryo Plastics Co., Ltd. June 2002 Ryowa Sheet Metal Processing Co., Ltd* Sep. 2003

NedCar (Netherlands) Sep. 1999 MMNA (USA) Mar. 2001 MMTh (Thailand) June 2001 MMPC (Philippines) July 2001 MMAL (Australia) Mar. 2003

Environmental AuditingIn order to confirm that environmentalmanagement systems are functioningeffectively and to maintain and improvetheir operation, each MMC plant auditsitself internally at least once a year and isalso examined yearly by a third party.The internal audit check-sheets consist

of 600-700 items that are checked byqualified internal auditors. Items flaggedby the auditors are checked andreviewed by a senior officer, andappropriate corrective measures areimplemented. When action by a unit orgroup is found to be particularlyeffective, it is applied as appropriate inother units.External auditing of each plant in

FY 2003 revealed no majornonconformities, one minor one, andnine situations placed under“observation.” Overall, environmentalmanagement systems were found to bebeing operated and maintained properly.Items pointed out will be immediately

addressed and efforts continued toensure that systems are operated at ahigher level.

Preparation of auditing plan Instructions on points for auditing

Audit instructions

Review

Report of findings

Audit instructions

Audit team Audit team Audit team

Department under inspection

System of internal environmental auditing of MMC plants

Audit team Audit team

Department A Department B Department C Department D Department E

Senior Officer (Plant general manager)

Organization(Plant)

ISO secretariant

Audit

Report of findings

Confirmation ofcorrective measures

Findings compiled Announcement of practices for wider introduction

Environmental officer (Senior expert)

Emergency Measures and Environmental Incidents, etc.

ISO 14001 Certification

*On March 31, 2004, the company was sold to Futaba Industrial Co., Ltd.

See

15

Publication of Environmental Reports & Plant Reports

Since the first in September 1999,MMC’s environmental reports have beenpublished annually in two languages –Japanese and English – both as bookletsand online via the Internet and MMC’sinternal intranet.Individual reports on three domestic

plants are also published.

Pamphlet on the EnvironmentA pamphlet for schoolchildren, “Carsand the Environment,” was published inJune 2004, describing MMC’senvironmental activities in carmanufacturing. Containing some of thesame information as is in this report, thepamphlet uses colorful illustrations andpictures to describes the following:

MMC’s environmental convictions

Explanations of terminology, such as

“fuel efficiency”

Sustainability Plan

Efforts in each business activity

Examples environmental considerations

as seen in the COLT

The pamphlet is distributed during planttours, in classes on the environment, andby dealers, and will be available also atenvironment-related exhibitions.

Communication

1st issue (1999)

2nd issue (2000)

3rd issue (2001)

4th issue (2002)

September 1999

August 2000

September 2001

October 2002

5th issue (2003) July 2003

6th issue (2004) August 2004

Information via the Internet A variety of environmentally relatedinformation, including all past editions ofenvironmental reports, information onindividual vehicle models and our“Environmental Sustainability Plan” ( p.8-9), are available in a sectioncalled “MMC’s Environmental Activities”on our website. Up-to-the-minute environmental

information is disseminated, as well,whenever necessary, through pressreleases and on the website. The connections between automobiles

and the environment are, in addition,explained through a telephoneinformation service for schoolchildrenand in “Heart-Beat Kids Information forChildren” on our website.( p.45.)

Information on Individual Vehicle Models

Today’s consumers want to make“green” purchasing decisions. On itswebsite, MMC offers information inadvance for specific vehicle models.

Fuel efficiency

Exhaust emissions

Recycling, etc.

http://www.mitsubishi-motors.com/corporate/environment/info/j/

Cooperation in External EventsIn order to publicize and encourage thespread of low pollution vehicles, MMCexhibits low emission vehicles of variouskinds ( p.23-24,36) at exhibitionsand fairs throughout Japan. In FY 2003, MMC participated in the

following events.

Main events attendedIn FY 2003

Eco-Car World 2003

Exhibition at the 22ndWorld Gas Conference

Ministry of Land,Infrastructure andTransport Day

Osaka LEV Fair 2003

16th LEV Fair in Osaka

The 28th Energy &Environment Exhibition(ENEX 2004)

Shikoku EV Week 2003(Shikoku EV “Ekiden”)

Energy Life Hokurikuin 2003

Eco-Car Festa in Hachioj

11/21-23

11/9

9th Japan EV Festival 11/24

JARI Next-GenerationAutomobile Forum

Osaka InternationalLadies Marathon

InternationalGas Union

Ministry of the Environment, etc.

5/31-6/1

OsakaPrefecture

Shikoku EVChallenged2000 Committee

HokkokuShimbun, etc.

9/19-20

8/19-24

9/19-21

Japan EV Club

Osaka city etc.

Japan AutomobileResearch Institute(JARI)

Japan Associationof AthleticsFederations, etc.

EnergyConservationCenter, Japan

1/25

2/12-14

Tokyo HachiojiTakao LionsClub

Ministry of Land,Infrastructureand Transport

DateOrganizers

6/2-5

7/16

1/14

Region

Tokyo

Tokyo

Tokyo

Tokyo-Tokushima

Osaka

Ishikawa

Osaka

Tokyo

Ibarki

Tokyo

Osaka

Tokyo

MFCV exhibited at ENEX 2004 ( p.24)

MMC’s “Environment”

http://www.mitsubishi-motors.com/corporate/environment/e/

”Cars and the Environment” (Japanese version)

Publication of past environmental reports


See

See

See

See

Web

Web

Education of EmployeesOn-going educational activities areorganized for employees, primarilyinvolving various environment-relateddepartments such as the ISO Secretariat( p.14).


16

Education / Personal Improvement

Promotion of Idling Prevention Activities

We instruct employees to prevent idlingof vehicles when not in motion, andrequest to suppliers and customers.

Environmental Classes for Schoolchildren

MMC visited schools to teachenvironmental classes for the higherelementary grades. Information waspresented in an easy-to-understandmanner, illustrated using actual partsand vehicles. The program was very wellreceived.

Environment Month ActivitiesEvery June, designated “EnvironmentMonth” by the Japanese Ministry of theEnvironment, during this time MMCorganize the following activities to raiseenvironmental awareness within the company.

Environment-Related QualificationsMMC encourages its employees to attainofficial qualifications in environmentallyrelated areas. It has also introduced itsown qualification systems in some of itsoperations, such as waste paperrecycling – which serves the furtherpromotion of those activities in theworkplace. Internal environmentalinspectors ( p.14) are trained both inand outside the company, receiving thequalification of environmental auditor.

Environmental education for new employees

Environmental class using the Colt

Employees with Major Qualifications

1. Internal PR regarding Environment Month activities (Publication in the company newsletter and on the intranet of related articles, posting of posters and signboards)2. Participation in Environment Month symposiums

1. Inspection patrols at environmental faci l it ies and environmental testing2. Inspection of state of management of waste disposal and treatment contractors3. Voluntary community cleanup activit ies (participation in local cleanup activit ies, etc.)

1. Inspection of greenery at sites and planting of commemorative trees2. Participation in events organized by various organizations3. Donation to nearby elementary schools of colored carp raised in factory effluent

Type ofactivity Details

Personaldevelopment

Practicalactivities

Otheractivities

Category

Chief

Air

DioxinsPollutioncontrolmanagement

Water quality

Heat

Electricity

5

6

29

14

16

16Energymanagement

19

6

32Total

79Total

Vibration

Total (no. ofemployees)

Noise


Approach to Environmental Accounting

Starting with the first EnvironmentalReport (1999), MMC has includedenvironmental accounting data. Thedata are compiled based on the Ministryof the Environment’s EnvironmentalAccounting Guidelines (2002 version)*1.Note : Since FY 2003, the data has beencalculated for MMC alone – separatelyfrom Mitsubishi Fuso Truck and BusCorporation (MFTBC).

Environmental Accounting in FY 2003(1) Environmental protection costsEnvironmental protection costs in FY 2003increased from the previous FY partlybecause of introduction of cogenerationsystems ( p.28) in conjunction withmovement of the MMC head office, andadditional expenses for compliance withthe Automobile Recycling Law. Similarlyto the previous FY, environmentalprotection costs mostly comprised costsand activities for reducing environmentalimpact of products themselves andtaking steps to protect the environmentat the production stage – both of whichare major priorities for MMC (R&D costs:85.6%; business-area costs : 10.2%).The environment-related portion of

combined costs – i.e., spending onactivities as well as on protection of theenvironment – was calculated bydifferential costing (i.e., the deductionfrom the total of costs not related toenvironmental protection). Where thiswas not possible, costs were calculatedby estimating the proportioncontributing to environmentalprotection.Total costs for environmental protection

accounted for 2.2% of total sales( p.49).

Notes

*1: MoE Environmental Accounting Guidelines (FY 2002 version)

*1: The terms and table classifications used in this chapter are based on these guidelines.

See

See

See

See

17

(2) Environmental protection effects*1

The principal quantitative data used asindices of environmental protectioneffects are shown in the table. All resultswere better than or at the same level asFY 2003. Please also refer to theindicated pages in this report for datanot shown in the table.

(3) Economic benefits accompanying environmental protection measures*2

Cost reductions associated withenvironmental protection measures areshown in the table. Reduction ofenergy-related costs from FY 2003includes accomplishments at less thanbudgeted costs at all of MMC’s plants,reduced lighting in logistic warehousesand reduced use of delivery trucks.In the area of waste disposal costs and

water purchases, waste disposal costsincreased from the previous FY, andMMC will make further efforts to reducethem. Other efforts to reduce costs included

changes in delivery systems (use offolding, corrugated cardboardcontainers) and use of recyclable packingmaterials (returnable racks). MMC willcontinue these and other efforts andregularly publish the results. Environmental measures undoubtedly

yield benefits in the form of reducedenvironmental risks as well, but it is notpossible at this stage to quantify thosebenefits.

Category*3 YOY % changeValue ( million)

(1) Business area costs 3,221

(1,458)

(110)

(1,653)

361

822

26,958

135

3

31,500

94.2%

(97.0%)

(189.7%)

(88.9%)

350.5%

85.4%

96.7%

108.9%

8.6%

96.8%

Pollution prevention

Protection of the global environment

Resource recycling

(2) Upstream/downstream costs

(3) Management activity costs

(4) R&D costs

(5) Social activity costs

(6) Environmental damage costs

Total

Item

Reduction of energy costs

Reduction of waste disposal costs

Reduction of the cost of purchase of water

589

-- 0.9

80

1998

420380

414450

325 315

1999 2000 2001 2002 2003

(FY)

( billion)

Category Item

370,000t-CO2

4,928,000m3

74t 62.7%

-72,900

15,600t-CO2

43.61kg-CO2/Car

94.4%

82.7%

-99.2%

103.1%98.3%

p.28p.33

FY 2003 YOY% change

Related page

Energy consumption in production process (total CO2 emission) Water use

Quantity of waste for final disposal

Average fuel economy by vehicle weight category (gasoline passenger cars and commercial vehicles) Number of old bumpers collected

CO2 emissions during domestic transportation of BU vehicles (Emissions per unit shipped)

p.30-31

p.20p.41

Effects relating to environmental impactand waste resulting from business activities

Effects relating to goods and services produced by business activities

Effects relating to inputs into business activities

Effects relating to transportation, etc.

1

3

4

Management activity costs2.6%

Upstream /downstreamcosts1.1%

Social activitycosts0.4%

Environmental damage costs0.01%

Business area costs10.2%

(1) Environmental protection effects

Breakdown of environmentalprotection costs

Change in total cost of environmental protection

(2) Environmental protection effects

(3) Economic benefits accompanying environmental(3) protection measures

R&D costs 85.6%

*Truck and bus businesses were included until FY 2001

p.34

Break down

1

2

3

2

Value( million)

￥

￥

￥

Notes

*1: Environmental protection effects Defined by MoE guidelines as “the quantitative impact on the environment of an organization’s operating activities and the increase or decrease therein”.

*2: Economic benefits accompanying environmental protection measures In the MoE guidelines, economic benefits accompanying environmental protection measures are defined as “the returns and the reduction and avoidance of

costs to an organization arising from its environmental protection activities.”

*3: Main categories of environmental protection costs(1) Costs on energy conservation, saving resources, and waste disposal, etc. at each plant. (2) Costs on collection of used parts, etc. (3) Costs on ISO 14001 certification and employee education

concerning the environment, etc. (4) Costs on R&D related to improving fuel efficiency, reducing exhaust emissions, development of clean energy vehicles, and recycling, etc.

(5) Costs on donations and membership fees paid to external environmental organizations, etc. (6) Costs on taxes and other charges paid to national and local governments, etc.


Vehicles are produced, used and recycled– the vehicle lifecycle – and they affectthe environment locally and globally invarious ways at each of those stages. MMC’s efforts are broad and

comprehensive toward reducing thetotal, long-tem environmental impact ofits business.

Environmental Impact of Vehicle Lifecycle


Procurement

Production

Logistics


Recycling

Others

Measures to ReduceEnvironmental Impact

EnvironmentalActivities

Environmental Impact of Vehicle Lifecycle*1

The main inputs (energy, etc.) andoutputs (emissions, etc.) generated ateach stage of the vehicle lifecycle*1 areshown below. Environmental impactsand the concrete steps being taken toreduce them will be explained in thefollowing pages.

Air pollution,water contamination,noise and waste

HC,NOx...

Acid rain

Global warmingDestruction of the ozone layer

SO2,NOx...

CO2,CH4,HFC...

Time Long term

Sp

ace

E

xte

nsi

ve

ra

ng

e

Vehicle and Global Environmental Issues

Globalenvironment

Regionalenvironment

Areaenvironment

Log

isti

cs

Pro

du

ctio

n

Rec

yclin

g

Sale

s

Res

earc

h a

nd

Dev

elo

pm

ent

Pro

cure

men

t

Parts and materials manufacturers

Vehicles,parts, etc.

Used parts,recycled parts, etc.

Recyclablematerials

Recyclable materials, used bumpers, etc.

Parts,materials,etc.

Parts,materials, etc.

(Particular focus on recycling and reduction of environmental impact of use at the product development stage)

CO2,SOx,NOx,VOCwastewater, noise,chemicals,industrial waste, etc.

CO2,NOx,COHC,PM, noise,etc.

Physical flow

IMPUT

OUTPUT

Prop

er d

ispo

sal

by c

ontr

acto

rs, e

tc.

Use

of

pro

du

cts

CO2,NOx,COHC,PM, noise,etc.

End-of-lifevehicles,wasteparts, etc.

Gasoline,light oil, etc.

Gasoline,light oil, etc.

Energy(electricpower,city gas, oil, etc.), water, etc.

Airbags,fluorocarbons,automobileshredderresidue, etc.

Measures to Reduce Environmental Impact

18

Notes

*1: Vehicle Lifecycle

*1: As used here, this means the stages from designing of industrial products to their ultimate disposal or recycling.

*1: It is equivalent to the concept of PLM : “Product Lifecycle Management.”

Adoption of LCALCA (Life Cycle Assessment) is a methodof forecasting and assessing the impacton the environment throughout the lifeof a product, from the extraction of rawmaterials to the disposal and recycling.*2

MMC began addressing introduction ofLCA in FY 2000, and in FY 2002committed itself to it as a tool forassessing the company’s efforts inpreventing global warming, which is oneof the priorities of DfE activities. MMCcurrently applies LCA in calculations andanalyses of CO2 emissions. In FY 2003, MMC developed a

database on production processes for itsin-house parts, and also acquired dataon aluminum and plastic partsmanufactured by suppliers.A comparison of CO2 emissions

throughout the entire lifecycle was donebetween MMC’s Concept Test Car “i”( p.22) and a steel-body vehicle ofthe same class.Methods and databases will continue to

be developed in order to further raiseaccuracy and efficiency.

Promotion of DfE“DfE” stands for “Design forEnvironment.” MMC considers, DfE is anenvironmental management system inproduct design and development forreducing environmental impactthroughout the entire lifecycle of aproduct, beginning with the extractionof raw materials.“Pursuit of implementation of DfE

process” is included in the EnvironmentalSustainability Plan ( p.8-9), and theDfE Promotion Working Group under theEnvironmental Management / RecyclingCommittee ( p.7) promotesfull-scale implementation.In FY 2002, MMC established a

framework based on the DfE conceptand began development of theimplementation system. In thatdevelopment, items (such as improvingfuel economy and reducing weight) thatwould lead to reducing environmentalimpact were determined for thefollowing priority areas.

Prevention of global warming

Prevention of environmental pollution

Controlling resource consumption and

waste generation

In the area of global warming, forexample, MMC is working to reduce CO2

emissions through improved fueleconomy and reduced vehicle weight. To prevent environmental pollution,

exhaust emissions are minimized, whilegreater fuel economy and lighter weightcontribute to controlling resourceconsumption.

At the stage of implementing DfE,physical quantities (such as CO2

emissions) from related activities (such asimproving fuel economy) are forecastand assessed. Environmental regulationsand agreements are of course observed;in addition, the physical quantities thusforecast are continuously improved bysetting MMC’s own targets higher, as arule, than the environmentalperformance of current models.Processes are checked and assessed by

top management at each “QualityGate.”*1


5000

200

50

00 15000 250002000010000

Addressing CO2 emissions in vehicle lifecycleConcept test car “i”

300

250

150

100

Concept Test Car “i”

Run(km)

Usual steel - body Vehicle

CO

2 em

issi

on (I

ndex

)

Global warming

Environmentalpollution

Resourceconsumption/waste

The closer to thecenter, the less theenvironmental impact Current models

Successors

Priority DfE activities and their promotion

Promotion

Promotion Promotion

Observance of environmentalregulations/agreementsSetting MMC’s own targetsfor improvement

Forecast and assessmentof environmental physicalquantities

Quality Gate (QG) and DfE

QG F Determination of product concept

QG E Determination of framework

QG D Determination of specifications

QG C Validation of prototype

QG B Completion of development

QG A Conclusion of final quality confirmation

Recycling, OthersSales / UseLogisticsProductionProcurementR&DEnvironmental Activities

19

Priority DfEactivities

Prevention ofglobal warming

Prevention ofenvironmentalpollution

Controlling resourceconsumption andwaste generation

Reduction ofexhaustemission

Examples ofactivitiesReduction of

CO2 emissions

Controlling resourceconsumption

Examples of successful priority DfE activities

Reduction ofvehicle weight

Reduction ofpollutants

Improved fueleconomy

See

See

See

Notes

*1: Quality Gate (QG)

*1: As used in the Mitsubishi Motors Development System ( p.46), QG consists of six “gates” where the progress of a project is checked and assessed.

*1: These start with the stage of determining a product concept (Gate F) and end with confirmation of final product quality (Gate A).

*2: ISO 14040 series provides international LCA standards.

See

Prevention of Global WarmingIn order to control the release ofgreenhouse gases – a leading cause ofglobal warming – measures are in placeto:1. Reduce carbon dioxide (CO2) emissions

Early achievement of fuel economy

standards*1 under the Energy

Conservation Law*2

Improved fuel economy by, for example,

developing more efficient power

trains*3, making car bodies lighter,

reducing running resistance, and

using energy-saving air conditioners.

2. Reduce the use of the CFC-substitute HFC134a refrigerant in car air conditioners.

Reduce carbon dioxide (CO2) emissionsTarget standards for fuel economy*1 arelaid down under the EnergyConservation Law*2 to reduce CO2

emissions from vehicles. (These targetsare to be met by gasoline vehicles by FY2010, and by diesel vehicles by FY 2005.)MMC works to improve fuel economy

by, among other things, improvingengines and drivetrain systems, reducingthe weight of vehicles, and reducingrolling and air resistance, as we bringnew models to market in order toachieve the 2010 standards ahead ofschedule by around FY 2005.The new model introduced in FY 2003

(Grandis) meets the target standard forfuel economy.

Sticker Indicating Fuel-EconomyAs of April 2004, cars meeting the fuel-economy standards*1 stipulated in theEnergy Conservation Law*2 bear a sticker to that effect affixed in a readily visiblelocation, such as the rear window. All new models launched after 2002 – Colt,Lancer Cargo and Grandis – already exceed the fuel economy standards for 2010(some by more than 5%).

24

Mini-structure A : Minica vans, etc.Mini-structure B : Minicab vans, minicab trucksLightweight : Lancer Cargo

Gasoline vehicles

8

10

12

14

16

18

20

22

24

6

(km/R)

875 1000 1250 1500 1750 2000 2250

Gasoline truck / Automatic transmission vehicle

8

10

12

14

16

18

20

22

mini-750structure A

mini 875 structure A

mini 875 structure B

mini 1000 lightweight 1250

6

(km/R)

Gasoline truck / Manual transmission vehicle

8

10

12

14

16

18

20

22

24

mini-750structure A

mini-750structure B

mini 875 structure A

mini 875 structure B

mini 1000 lightweight 1250

6

(km/R)

Achieving fuel economy standards



Average fuel economy by weight class (10-15 mode)

(kg)

FY 2002FY 2003Achieving fuel economystandards (FY 2010)

FY 2002FY 2003Fuel economy standards (FY 2010)

FY 2002FY 2003Fuel economy standards (FY 2010)

Notes

*1: Fuel economy standards

*1: Set for passenger cars and commercial vehicles of a gross vehicle weight of 2.5 tons or under.

*2: Energy Conservation Law

*1: Official name : Law on Rationalization of Energy Use

*3: Powertrain

*1: Power transmission devices, including engine, clutch, torque converter and transmission.

875 1000 1250 1500 1750 2000 2250

20

25

15

10

5

Weight Class

(km/R)

Fuel Economy

Fuel Economy Standards

Colt

Grandis

(kg)



20

(1) High-efficiency engineThe MIVEC*1 engine, which contributesto improved fuel consumption, reducedexhaust emissions and increased power,was adopted for all Grandis models in2003, following use in the new Coltlaunched in 2002.

The MIVEC engine employs a newstructure developed from an alreadyinnovative MIVEC system. A newcomputer-optimized design increases airintake and improves stability ofcombustion, delivering high power andlow fuel consumption with regularunleaded gasoline, qualifying for thedesignation “Ultra LEV “ ( p.22).

(2) Expanded use of CVT*2

The CVT employs a metal belt totransmit power at continuouslyvariable ratios, contributing to fuelefficiency by allowing the engine tooperate always in its mostefficient range.

Grandis MIVEC engine

Reduction of use of air-conditioner refrigerant (HFC134a)

In order to reduce the use of HFC134a( p.40), which has an even greatergreenhouse effect than CO2, we have,starting with models launched in 1997,been employing the following:

More compact heat exchangers

Refrigerant-saving air conditioners

using more efficient condensers

The new model Grandis in FY 2003employs the above such technology.We are also working in collaborationwith air-conditioner manufacturers todevelop air conditioners that use CO2 asa refrigerant instead of HFC134a.In order to prevent the release of

fluorocarbons into the atmosphere,vehicles sold in Japan have since April 1,2002 been labeled with caution labelsregarding compliance with theFluorocarbons Collection andDestruction Law.

Condenser

Air conditioner unit

Air compressor

Drive pulley

Driven pulley

Low gear Overdrive

Steel belt

CVT device (image)

A compact, lightweight CVT has beendeveloped and is being phased into usein small cars, starting with Lancer modelsintroduced in May 2000.Of all Mitsubishi-made models

registered in FY 2003, 30% wereequipped with CVT.

(3) Energy-saving air-conditioner systemThe air conditioner used in the Grandisemploys the following new technologiesin order to offer both improved airconditioning performance and greaterpractical fuel economy.

More efficient component parts (air

compressor, air conditioner unit and

condenser)

Optimized control (energy conservation

control, harmonized control of air

conditioner and engine)

Reduced air conditioner weight

Colt

Dion

Lancer

Lancer Wagon

Lancer Cargo

All models

Except turbo

Except turbo

Except turbo

Except 4WD

Models Equipped with CVT

Caution label for HFC134a

Grandis Air-Conditioning System

Notes

*1: MIVEC (Mitsubishi Innovative Valve timing Electronic Control system)

*1: Generic term for MMC engines equipped with variable valve timing mechanisms.

*2: CVT (Continuously Variable Transmission)

*1: Capable of efficiently getting the most out of engines.

See

See


21

Prevention of Air PollutionJapan, Europe and North America, alongwith many other countries and regions,have been tightening vehicle exhaustemission standards, and noxious gasemissions have been reduced to the levelof 1/100 what they were beforeregulation. Promptly responding to suchregulations, we have been working torealize ever-cleaner exhaust-gas emissions.

Concept Test Car “i” – Reducing fuel consumption and exhaust emissions –

To improve environmental performance, the concept test car “i” incorporates:

A lighter-weight body using an aluminum space framePower trains combining the newly developed 1.0R MIVEC engine and CVT ( p.20 & 21)The “Mitsubishi Smart Idling System” with additional idle-stopping device Improved aerodynamic performance (reduced air resistance)

In the EcoTests by the German automobile federation ADAC (Allgemeiner Deutscher Automobile Club),

the “i” surpassed EURO4 exhaust standards and earned the highest rating of five stars for both

emissions and fuel economy. Consumption was 3.8R/100km, with CO2 emissions of 89g/km – better

than the standard of 90g/km for 3-liter cars. In addition, the “i” uses a newly developed MR*2

platform that provides – consistent with its original concept – outstanding comfort and safety in collisions.

Future marketing plans, both domestically and internationally, are being developed.

http://media.mitsubishi-motors.com/pressrelease/j/motorshow/detail905.html

Reduction of Gasoline Engine Exhaust Emissions

New short-term exhaust emissionsregulations (2000 regulations) wereimplemented in 2000, and a lowemission vehicle (LEV) certificationprogram was introduced by the Ministryof Land, Infrastructure and Transport torecognize vehicles with emissions belowthe new standards (classified asTransitional LEVs, LEVs and Ultra LEVs).In conjunction with new long-term

exhaust emissions regulations (2005regulations) to come into force in 2005,which will be the most stringent in theworld, a new low emission vehicle (LEV)certification program was introduced inOctober 2003.MMC began obtaining certifications in

FY 2000, and new models launched inFY 2003 (Grandis, Minica and Airtreck)have been recognized as Ultra LEV (U-LEV) ( p. 36).

In addition, by March 2004 the Colt,Grandis and 14 other models had beenrecognized as LEVs under the newregulations (50% lower exhaust emissionsthan the 2005 regulations).

The “i” exhibited at the2003 Tokyo Motor Show

Notes

*1: Mitsubishi Smart Idling System

*1: Automatically stops the engine as the vehicle waits at a red traffic light, and restarts it when the light changes to green.

*2: MR (Midship-engine / Rear-wheel drive)

*1: Rear-wheel drive with the engine positioned in the central part of the body.

’05

1.6 2.7

5

’05

1.3 0.8

4

2.61.6

8

’05

100

6050

45

1.62.75

’05

100

75

59

48

1.30.85

100

5045

20

2.61.68

100 before regulation

Source :Created by Japan Automobile Manufacturers Association, Inc., based on data from the Ministry of Land, Infrastructure and Transport

Domestic trends in exhaust emissions regulations (for gasoline-powered passenger cars)

New short-term regulations (2000 regulations)

New long-term regulations (2005 regulations)

Standards for “10-15 mode consumption” and“11 mode consumption” (The above graph is for “10-15 mode”)

Standards for combined “10-15” and “11” modes(HC regulations excluding methane)

’95 ’0002468

10

(FY)

’95 ’0002468

10

(FY)

’95 ’00 ’0502468

10

(FY)

0

20

40

60

80

100

’65 ’75 ’85 ’95 ’00

(%)

0

20

40

60

80

100

’65 ’75 ’85 ’95 ’00

(%)

0

20

40

60

80

100

’65 ’75 ’85 ’95 ’00 ’05

(%)

(FY)

(FY)

(FY)

(%)

(%)

(%)

CO

HC

NOx

0.010.00 0.02 0.03 0.04 0.05 0.06

0.01

0.00

0.02

0.03

0.04

0.05

NOx(g/km)

NMHC(g/km)

2005 standards

0.06

Source:Created by the Japan Automobile ManufacturersAssociation, Inc., based on data from the Ministry of Land,Infrastructure and Transport

Effects of Exhaust Emissions Regulations

LEV cars( )

Ultra LEV cars( )

LEV cars( )

LEV cars( )

Ultra LEV:75% lower than 2000 exhaust emissions standards LEV:50% lower than 2000 exhaust emissions standardsTransitional LEV:25% lower than 2000 exhaust emissions standards

LEV Certification Standards Sticker

New 4-star LEV:75% lower than 2005 exhaust emissions standards

New 3-star LEV:50% lower than 2005 exhaust emissions standards

See

See


22

Web

*1: EV (Electric Vehicles)

*2: CNG (Compressed Natural Gas)

Improved interior environmentsIn order to provide more pleasant, safeinterior spaces, MMC, through improvedmaterials and processing, is reducing itsuse of organic solvents and other volatilechemicals.As a result, in comparison between

new and older model Grandis, in newGrandis using improved interiorcomponents, chemical materials fromadhensives has been reduced to less thanone third, and chemical materials frompaints reduced to less than two third.

Deodorizing roof liners in the newGrandis released in May 2003 absorbcigarette smells, human odors andformaldehyde fumes and resolve theminto water, carbon dioxide and otherproducts – a first in the automobileindustry.The liners quickly eliminate the foul

smells not only of cigarettes andammonia (human odors), but areeffective as well with formaldehyde. Thisdeodorizing ability is sustained because itis based on catalytic action; the materialitself does not change.A clean air filter with an ability to

deodorize not only pollens and dust, butbad smell of exhaust gas is alsoemployed to prevent allergens, bad smelland other such elements from enteringinto the inside.

R&D on clean energy vehicles (CEVs)Electric vehicles

Electric vehicles (EVs)*1, which emit noexhaust gases, still have obstacles toovercome, notably the need for longerranges and shorter recharging times. But many of their componenttechnologies, such as electric motors andbatteries, are also crucial to fuel-cellvehicles.Given the potential, MMC is continuing

its R&D on EVs, and has taken part in“Shikoku EV Week” every year since2001. In August 2003 it participatedwith the Eclipse EV*1, an experimentalcar driven by a high-performance motorand battery, obtaining additional usefuldata.

Natural Gas vehiclesClean-energy vehicles running on naturalgas emit less CO2 than gasoline-poweredcars and no black exhaust smoke. MMC sells natural-gas-fueled light

commercial vehicles and a natural-gas(CNG car)*2.( p.36)

Newtype

Previoustype

Improved interior components (to reduce chemical materials)

Coverings with deodorizing properties, to absorb and resolve contaminants

Reduced use of organic solvents and paint on surfaces

Reduced use of organic solvents inadhesives for ornamental coverings

【Adhesive ingredients】【Paint ingredients】

Concentration insidethe vehicle (μg/m3)

Concentration insidethe vehicle (μg/m3)

Experimental conditions : Using actual vehicles inconditions equivalent to standing outdoors all dayin the middle of summer

Comparison of chemical materials inside Grandis

Roof liners

Interior panels

Door trim

0 10 20 30 40 60 120 180 240

0

10

20

30

40

50

60

70

80

90

100

Cigarettesmell

Ammonia

Formaldehyde

Time (minutes)

(%)

Deo

do

rizi

ng

Experimental conditions :With nicotine at 20 ppm,ammonia at 200 ppm and formaldehyde at 80 ppm inseparate two-liter containers, each with 200 cm2 of ceilingmaterial, measurements were taken at normal temperature.

Eclipse EV

CNG minicab

See

Cigarettesmells

Humanodors

Chemicalfumes

Carbondioxide

Water

Absorbing andresolving

Grandis roof liner


23

Notes

A special combination unit was created to make it easier to monitor the entiresystem. It includes a power meter (statusof the fuel cell), meters displaying theremaining life of the secondary batteryand hydrogen supply, and variouswarnings.MMC is part of METI’s Japan Hydrogen

Fuel Cell Demonstration Project (JHFC),and FCVs were used as escort carsduring the Osaka International Women’sMarathon in January 2004.That experience served as a valuable

running test on public roads, yieldingbasic data on performance andenvironmental and safety characteristics,and verifying

technologies toward commercialproduction of the FCV.The MITSUBISHI FCV incorporates a

telemetry system enabling remotemonitoring of performance data in realtime – information necessary fordiagnosing problems and fordemonstration testing. Such dataincludes the remaining life of thehydrogen supply, mileage, and locationvia GPS*2. MMC’s “Vehicle Home Page” carries

the results of driving tests and otherinformation, and includes images fromcameras installed on the car.

Notes

*1: FCV (Fuel Cell Vehicle)

*2: GPS (Global Positioning System)

Name of carLength/width/heightWeight of bodyCapacityTop speed

Fuel cellsystem

Hydrogentank

Motor

Secondary battery

Form

OutputStoragemethod

Capacity

TypeMaximumoutput

Maximumtorque

Range

MITSUBISHI FCV

4755/1795/1690 mm

Rechargingpressure

2,000kg5 people140km/h150km

Solid polymer (made by Ballard)

68 kW

Compressed hydrogen

35 MPa

117R

Nickel hydrogenAC induction motor

65 kW

210N m

Secondarybattery

Hydrogentanks

Fuel cell systemDrive

System Layout Safety Equipment

MITSUBISHI FCV Vehicle Home Page

Power meter(fuel cell/battery)

Warning lamps RemaininghydrogensupplyStatus of fuel cell system/

Auto-trip display

Secondary battery(remaining life)

Meter Display

Major Specifications


24

Fuel Cell vehiclesFuel cell vehicles (FCVs) run on electricityproduced by reacting hydrogen with theoxygen in air, and have considerablefuture potential as clean energyvehicles (CEVs).In cooperation with DaimlerChrysler

(DC), MMC successfully had theMITSUBISHI FCV*1, based on the Grandismodel, certified in October 2003 by theMinistry of Land, Infrastructure andTransport (MLIT) in the category of athree-row-seating minivan. Safety systems include sensors to

protect against excessive voltage orhydrogen pressure, numerous safetyvalves, and a main circuit breaker.

Hydrogenwarninglamp

Hydrogen sensor

Safetyvalves

Hydrogen sensor

Hydrogen releaseoutlet

Main circuit breaker

Increasing Recyclability RatesSetting targets for recyclability and forreducing materials with environmentalimpact – starting at the early stages ofvehicle development – MMC activelypromotes 3R*1 design principles given inits recycling design guidelines.The following is an explanation of

MMC’s efforts made for the newGrandis model launched in FY 2003.

Designing to reduceMMC seeks to reduce the use of rawmaterials while maintaining durability.

(2) Use of recycled materialsMMC is expanding the recycling of PET*2

beverage bottles and other wastematerials.

(3) Easier dismantling and sorting Sorting and recycling are facilitated bymarking materials in advance andemploying constructions that are easierto dismantle.

Designing to reuse and recycleIn new Grandis, the recycling rate issubstantially higher than MMC’s owntarget rate of 90%, which was achievedthrough the following efforts.

(1) Choice of materialsMMC actively uses easily recyclable resin.

(2) Longer life

(1) Resource recovery

Notes

*1: 3R

*1: Reduce, Reuse, Recycle

*2: PET (Polyethylene Terephthalate)

*1: Used in, for example, beverage bottles, photographic films and magnetic tapes.

More compact and lightweight

Reduced number of parts

Reducing wire used in harnesses (about 30 circuits eliminated)( p.40) Employing air cleaner elements consisting only of filters

Using more aluminum engine parts Reducing use of thick sheets by employing high-tensile steel sheets (such as for body parts and chassis members) Employing tailored blanks ( p.31) (such as for body side panels and door panels)

See

See

Improving durability and corrosion resistance

LED (light-emitting diode) rear combination lamps (bulb replacement unnecessary) Expanding use of rustproof steel sheets (body, chassis and engine parts) Expanding use of body sealer and undercoating

Substituting thermoplastic resin

Employing olefin resin

Exterior components (such as bumpers and radiator grills) Interior components (such as instrument panels and trim)

Fuel hose Tailgate weather strips Engine vacuum hose Air intake hose

Easier to dismantle

Eliminating use of metal reinforcements Reducing the number of connecting bolts Front bumper : 4 bolts → 2 bolts Instrument panel : 10 bolts → 6 bolts

Marking

Marking resin and rubber items weighing 100g or more Marking large items, such as bumpers, repeatedly along their full length

Grandis components incorporatingeasily recyclable resin

Labeling of rear combination lamp

Marking on a rubber hose

JointSide panel

Body side panelApplication of tailored blank to body side panels


25

Recycling waste material from production processes

Bumpers, front grills, etc. Floor insulator (scrap carpet ends)

Recycling waste material from other industries

Engine oil level gauges (PET beverage bottles) Dashboard panel sound-absorbing materials (PET beverage bottles and used clothing)

(1) Use of lead-free materialsAmount of lead in the new Grandis isone-fifth the level in 1996.

In addition, from this FY, MMC is usinglead-free wheel-balancing weights onseveral models, including the Colt and theGrandis. MMC is endeavoring to achievethe reduction targets set by JAMA fornew models as quickly as possible.

(2) Mercury and cadmiumOnly minimal quantities of mercury andcadmium are used in parts such asfluorescent lighting. Use of mercury incombination meter lighting has beeneliminated through the use of LEDs.

(3) Hexavalent chromiumHexavalent chromium is now used as acocoon for galvanized parts, includingbolts. Where it can be done withoutcausing safety or quality problems,however, we are replacing such partswith substitute materials.

In addition to the four hazardoussubstances discussed above, MMCvoluntarily identifies others of concernand handles them in accordance withits “Environment-Impacting SubstancesManagement Guidelines” ( p.27).Data on environment-impactingsubstances contained in products aregathered from the InternationalMaterial Data System (IMDS)( p.27) and centralized internally,bolstering our efforts to reduce the useof such substances.

Reduction of hazardous substancesUse of four hazardous substances – lead,mercury, cadmium and hexavalentchromium – has been banned inprinciple since July 2003 under the ELVDirective of the European Parliament (EP)and the Council of European Union (EU)Ministers -2000/53/EC- ( p.39). Domestically, the Japan Automobile

Manufacturers Association, Inc. (JAMA),has set new reduction targets.MMC continues its efforts to eliminateuse of all such substances.

Substance Reduction Target

Lead

Mercury

Cadmium

Hexavalentchromium

January 2006 :One tenth or lower (from 1996 level)

January 2005 :No use except in the following: Liquid crystal displays Combination meters Discharge lamps Fluorescent lamps in cabins

January 2007 : No use

January 2008 : No use

Fuel tanks

Electrodeposited body paints

Glass ceramic prints

Grease for transmissions

Others

2000

1000

FY 1996Automobileindustryaverage

FY 2001ChariotGrandis

FY 2003Grandis

(g)

Lead in Grandis

Other recycled materials

In collaboration with parts and material manufacturers, we have taken the

initiative in expanding the use of other recycled materials. We developed

the world’s first canister case*1 made from scrap airbag material and is

expanding its use.

We also use recycled polypropylene (PP)*2 food containers and

wastepaper to make the air-cleaner cases used in many models, including

the Colt and the Lancer.

Recycled PPfood containers

Paper tubes(waste paper)

Air-cleaner caseCanister case(Recycled material madefrom scrap airbag material)


26

See

JAMA’s Reduction Targets (New Models)

See

See

Notes

*1: Canister case

*1: A device that temporarily absorbs the steam of the gasoline that occurs from a fuel tank

*2: PP (Polypropylene)

*1: Used for film and molded products, and melted and spun into textile products.

Green Procurement*1

MMC began what is called “greenprocurement” in November 2000,seeking to make its purchases moreenvironmentally friendly. As part of this,MMC is calling on all suppliers of partsand materials to do the following:

To acquire ISO 14001 certification (the

international standard for environmental

management systems) ; and

To disclose data on environment-impacting

substances contained in products and

goods they deliver.

Acquisition of ISO 14001 Certification

As stated in the EnvironmentalSustainability Plan ( p.8-9), MMC isworking to achieve the target of havingall suppliers acquire ISO 14001certification by the end of FY 2004.As of the end of FY 2003, 352 suppliers

out of a total of 406 – 86.7% – hadobtained the certification.

Notes

*1: Green Procurement

*1: “Green procurement” as used in this section does not include environmental preservation activities related to

*1: purchasing office supplies and other materials for use in the office.

On July 1, 2003, MMC issued its“Environment-Impacting SubstancesManagement Guidelines” – its policieson managing environment-impactingsubstances – and its “IMDS InputGuidelines,” which were distributed toall suppliers.MMC has designated 89 substances as

subject to management, including fourhazardous substances that are, inprinciple, banned from use. In FY 2003,with IMDS, MMC began gatheringinformation on environment-impactingsubstances contained in three models.It will gradually expand application to

other new models.

Management of Information on Environment-Impacting Substances

In Europe, use of four hazardoussubstances – lead, mercury, cadmiumand hexavalent chromium – has beenbanned in principle under the ELVDirective of the European Parliament (EP)( p.26). Domestically, the JapanAutomobile Manufacturers Association,Inc. (JAMA), has set new reductiontargets ( p.26). To cope with these trends, MMC has

begun information gathering onenvironment-impacting substancescontained in goods delivered using theInternational Material Data System(IMDS), a system to gather data onmaterials and understand environmental-impacting substances contained invehicles, and to centralize managementof such information.

Alreadyacquired86.7%

Will have acquiredby FY 2004 12.6%

0.7%

2001

100

50

0

20032002(FY)

(%)

45

59

86.7

ISO 14001 compliance by main suppliers

State of ISO 14001 complianceof main suppliers (FY 2003)

others

Procurement


27

See

See

See

“Environment-Impacting SubstancesManagement Guidelines”

“IMDS Input Guidelines”

Energy Conservation (Prevention of Global Warming)

In order to conserve energy so as topreserve the earth‘s resources andprevent global warming, we are workingto cut energy use (such as use ofelectricity and fuels) and to curbemissions of the greenhouse gas CO2

generated as a result of such use.Main energy saving measures

Appropriate operation of cogeneration

systems*1

Reduction of motor outlet pressure

(plant air, steam)

Minimization of energy consumption

outside production hours (stoppage of

intake and exhaust fans, etc.)

Introduction of more efficient equipment

Revision of work and operating conditions

(temperature settings, drying furnace

ignition times, etc.)

Use of waste heat recovered from

incinerators (Recovery of steam)

28

Environmental SetupMMC produces a range of vehiclesincluding passenger cars, commercialvehicles and mini cars. Corecomponents, such as engines and carbodies, are manufactured within thecompany, while other parts may beprocured from specialist manufacturersfor assembly into vehicles by us. Theproduction processes at each of MMC’splants are shown below :

Having established subcommittees underthe Environmental Council’s ProductionCommittee ( p.7), and a number ofteams under those subcommittees,MMC carries out specific efforts toreduce and prevent environmentalimpact at its plants.

Notes

*1: Cogeneration System Cogeneration is a means of efficiently extracting energy by simultaneously generating electricity by turbine (such as gas turbines powered by city gas)

and using the waste heat as a heat source for uses such as air conditioning and water heating facilities.

Production

Machining / Assembly

Resin forming

Casting

Forging

Pressing

Assembly

Okazaki Kyoto Shiga Mizushima

Production processes by plant

See

-Nagoya subcommittee-Mizushima subcommittee-Powertrain subcommittee

-PMC subcommittee

-Production Technology Subcommittee

-Product logistics

-Environment protection steering team

-Saving energy steering team

-Logistics steering team (Logistics improvements within plants)

-Measures for dealing with new issues

-Reduction of CO2 emissions in logistics for built-up vehicles -Improvement of KD and crating/packing of repair parts.

Cooperation

Production Committee

Secretariat(Secretariat Council)

(Meets twice a year)

As a result of energy conservation andimproved production systems at plants,total energy use in FY 2003 at theproduction stage (total CO2 emissions)was down 24% from FY 1990, to370,000t-CO2. CO2 emissions in relationto sales were 26.0t-CO2 per ¥100 million(a reduction of 4% from FY 1990), andincreased by .070t-CO2 per ¥100 milliondue to a decrease in sales in FY 2003.

Turbo motor using waste heat from incinerator

Organization and Activities of the Environmental Council‘s Production Committee

Trends in energy consumption(CO2 equivalent)

Breakdown of energy consumpton,FY 2003

392 370

200

01990

487

27.2

1991 1992

400

600

25.3 26.025

20

30

35

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003(FY)

(1,000t-CO2)

CO2 emissions to sales

Total CO2 emissions

(t-CO2 / 100 million)

Purchasedelectricity63%

Others(purchased steam,gasoline, light oil, coke)8%

214,000k /year(crude oil equivalent)

City gas13%

City gas forcogeneration

9%

Kerosene/fuel oil7%


29

(2) New painting shopAs part of a renewal project for its bodypainting shop, the Mizushima Plantconstructed a new facility (scheduled foroperation in FY 2004), incorporating thefollowing energy-conservation devicesand measures :

Highly efficient transformers

Control system for multi-unit small-

sized boilers.

Heat storage system (equalizing

power loads for air conditioning)

Examples of energy conservationmeasures(1) New Welding GunAutomatic spot-welding guns driven bytandem air cylinder pistons werereplaced with automatic electric weldingguns driven by electric motors,conserving energy. The air cylinderdevice wasted energy through the loss ofcompressed air when it started, andthrough further leakage thereafter.(Energy saving : 0.41Scrude oil equivalent per unit per year)

Mizushima Plant and Energy Conservation

With multiple production processes, the Mizushima Plant manages energy conversation for all of its operations, including special energy conservation patrol every three months, and public contests for posters and catchphrases on energy conservation.In 2003, 3,129 catchphrases were submitted for Energy Conservation Month, with seven selected for use. The plant was alsoawarded a FY 2003 prize by the Director-General of the Chugoku Regional Bureau of Economy, Trade and Industry in thecategory of electricity, in recognition of its excellent energy management.

Selected catchphrases- Yours is the leading role in energy

conservation. Action comes first. - “Have I turned it off?“ . . . If you‘re

not sure, check!- Energy conservation protects our

green earth

Gold-Medal winning poster

Air gun changed to a servo gun


Friction conveyers

Heat insulation in building roofs

(double shingles with glasswool)

New painting shop at Mizushima Plant Small-sized boilers

Cold-water heat storage tank

Award certificate

30

Notes

*1 : YieldThe proportion of raw materials that is actually used in products.

*2 : Zero landfill emissionsMMC define emissions as “zero emissions“ if the proportion of waste generated disposed of by landfill is 0.1% or less of the total.

The target of zero emission of landfillwaste was achieved by all plants inMarch 2002, which was maintained inFY 2003. Of total waste generated(224,000t) in FY 2003, landfill wasteemissions accounted for only 0.03% – an improvement from FY 2002 –through and improved resource recoveryrate (99.5%) and reduction of waste byincineration (0.48%). Our aim now is tomaintain zero emissions and to continuepromoting the 3Rs ( p.25).

Reduction of WasteEfforts to reduce waste generated duringproduction processes focus on increasingthe recycling rate and minimizing thevolume of material disposed of inlandfills. This means more efficient use ofresources and reduced environmentalstress - all toward creation of asustainable society. Major waste :

Metal scraps

Slag (waste casting sand)

Waste oil

Sludge

Emissions of these types of waste arebeing reduced by improving productionmethods and material yields*1. Wastethat nevertheless results is recycled orotherwise reduced as much as possible,minimizing what has to be disposed of inlandfills.Through such broad and on-going

efforts to control the generation ofwaste, combined with maximum recycling,MMC has been working to achieve zeroemission*2 of landfill waste.

300.0

200.0

100.0

0.0

6

4

2

0

319293 296

260228 224 224

6.1

3.4

2.5

1.5

0.4 0.05 0.03

(1000t / year) (%)

(FY)1997 1998 1999 2000 2001 2002 2003

EmissionsLandfill Disposalrate of landfill disposal

Waste emissions / disposal and landfilldisposal

See

59%32%

4%

2%

1% 1%

1%

Metal scrapsSlag

Waste oil

Waste plastics

Sludge Other waste

General waste

Total 224,000t /year

Breakdown of waste for landfill in FY 2003

Thorough sorting of general waste(paper, cans, plastic containers) andincreased recycling have similarlyreduced emissions for incineration.Waste incinerators at the Kyoto Plantand Mizushima Plant were closed.

(1) RecyclingRecycling includes “material recycling,“the reuse of materials themselves, as rawmaterial for new items, and “thermalrecycling,“ making positive use of theheat generated when, for example,waste oil and plastics are incinerated.

Waste casting sand

Metal scraps

Chemical sludge

Paint sludge

Washing thinner

Waste oil

Plastic waste

Waste water treating sludge

Glass and ceramic waste

Dust

Grinding sludge

Incineration ash

Paper

Iron material, roadbed material

Casting material

Cement materials

Fuel

Recycled thinner, fuel

Recycled oil, fuel

Plastic material,cement materials, fuel

Cement materials

Glass material,roadbed material

Cement materials

Cement materials

Roadbed material(after melting and solidification)

Recycle paper materials

Kinds of wasteGenerate source Examples ofrecycling uses

Stamping shop

Painting line

Whole plant

Office, etc.

Casting shop

Examples of Recycling

Metal scrapsWaste oilWaste paperSlagGlass and ceramic waste

Heat recovery

Recycling(95.75%)

SludgeWaste plasticsWaste oil & liquid wasteWaste paper, waste wood

Incineration(4.23%)

Incinerationash

Reuse rate (96.0%)Recycled metalsRecycled oilRecycled paperRoadbed materialCement materials, etc.

SteamFuel (Auxiliary Fuel oil)

Thermal recycling(3.51%)

Direct landfill (0.02%)Glass and ceramic waste, other slag

Reduction(0.48%)

Landfill(0.03%)

Was

te

Waste disposal process in FY 2003


Storage of PCBsPCBs (polychlorinated biphenyls) used asinsulating oil in transformers andcondensers are properly controlled asrequired by law. The total number oftransformers and condensers stored atthe end of FY 2003 was 1,243.

Prevention of Soil and Groundwater Pollution

In addition to checking for noxiousmaterials at existing wells, we aresteadily establishing new sampling wellson the borders of plant premises (inlandplants), in order to monitor groundwaterand assure communities that ouroperations are having no adverse effectson water quality or soil.These and other initiatives are proactive

and include investigations at individualplants and the issuance of manuals onpreventing pollution.

(t / year)

(FY)

1,000

0

2,699

2,000

3,000

4,000

2001

2,479 2,233

2002 2003

3,177

2000

PCB storage warehouse

431

Tailored Blanks

The “Tailored Blank“ method helps realize higher strength and lighter weightby welding together sheets of different thickness and properties to create a singleblank that can then be processed in a press. The result is optimal allocation ofmaterial. By using a thicker or stronger sheet for parts that require greater strengthand a thinner sheet for other parts, it is possible to reduce weight while at the sametime maintaining strength.

Coil

Press

Blanking Tailored Blank

Welding

Other advantages of this methodare that it reduces the number ofparts used and cuts materialand processing costs.The technology was introduced in

October 2002 and is currently usedon Colt and Grandis models. Newright-angle and multi-linear (multi-direction) joint techniques areexpanding the number ofcomponents for which the methodcan be used.

Emissions and transfers of substancessubject to PRTR*1


(2) Reduction of byproduct emissionsIn its promotion of the “3Rs“( p.25)for reducing waste emissions, MMC ispaying particular attention to metalscraps and waste casting sand, whichaccounted for about 90% of wasteemissions in FY 2003 in proportion toproduction output (emissions to sales),seeking to reduce them by about 2%from the 2001 level by the end of FY2006. Emissions in relation to sales in FY2003 were 13.9t per ¥100 million, anincrease of 0.7% from the level of FY 2001.Main measures :

1. Improvement of yield through use

of tailored blanks

2. Improvement of yield by shaping

two parts together in presses

3. Reduction of waste shavings

through reduction of machining area

Chemical Substances ManagementThe properties of new chemicals anddetails of plans for their use are carefullyexamined and the advisability of theirintroduction determined using pre-screenings for toxicity. In addition, stepsare taken to reduce emissions ofchemicals, prioritized according to risklevel. Emissions and transfers decreasedby about 10% from the previous fiscalyear and MMC is continuing its efforts.( p.1 Environmental data by plant)

Notes

*1 : PRTR (Pollutant Release and Transfer Register)

*1: Under the PRTR system, businesses themselves survey and report to the authorities emissions into the atmosphere and transfers of waste from plants

*1: and business establishments. These data are compiled by the authorities and published together with information on toxicity.

*1: (In March 2003, those data were published for the first time.)

Well for monitoringgroundwater

See

See

(3) DustWe are working to cut emissions of dustgenerated by casting facilities, boilersand waste incinerators, etc. by capturingdust with high-performance dustcollectors such as bug filters andremoving it using afterburners, and alsolimit emissions by proper maintenanceand control of combustion.

(4) VOC*1

In painting processes for bodies and parts,we are working to cut VOC emissionsthrough the following measures:

Additionally, in the renewal of its bodypainting shop ( p.29), theMizushima Plant is taking new steps tofurther reduce VOC emissions (target25g/m2) by, for example, the adoption oflow-solvent waterborne paints.

Prevention of Air Pollution( p.1 Environmental data by plant)

(1) Sulfur oxides (SOx)The use of cleaner energy sourcescontaining less sulfur, such as keroseneand city gas, for combustion facilities,such as boilers and industrial furnaces,has enabled SOx emissions to be reducedto extremely low levels.(Fuel conversion in 1995 : Fuel oil A → city gas)

(2) Nitrogen oxides (NOx)We have long made every effort tominimize NOx emissions, such as byinstalling low NOx boilers and using lowNOx burners. We continue to seek andtake active steps to conserve energy andreduce NOx emissions.

Notes

*1 : VOC (Volatile Organic Compounds) Xylene, Toluene, etc.

(5) Dealing with dioxinWe have taken comprehensive action tocurb emissions of dioxin, includingclosely controlling combustion andmanaging waste for incineration (such asby separating waste containing chlorineand reducing the total quantity ofincineration waste). Through sorting andrecycling of municipal waste, the volumeof combustible waste has beendramatically reduced. As a result, twoincinerators were shut down in FY 2002.

(6) Planting trees at plantsWe also try to add greenery at plants.40

5060708090

302010

0

81

38 32

,94

,95

,96

,97

,98

,99

,00

,01

,02

,03

(tons / year)

(FY)

300

350

200

150

250

100

50

0

Gas turbine Others

(tons / year)

,94

,95

,96

,97

,98

,99

,00

,01

,02

,03

(FY)

148

32

169

58

151

50

Melting furnace dust collector(Powertrain Plant)

Kind

Evergreen arbors

Deciduous arbors

Flowering shrubs

No. of Kinds

No. of Trees

25

25

35

13,400

1,600

71,000

Camphor, Japanese privets, Japanese chinquapins, Quercus phillyraeoides & pine

Chinese tallow, various types of cherry, plum, keyaki & maple

Azaleas, Indian azaleas, glossy abelias & Camellia sasanqua

Other ( 33,300m2 ) Turf

Note: Greenery area, 21.8%; environmental facilities area, 23.8%

Greenery at Okazaki Plant

32

SOx emissions

Greenery at Plants


See

NOx emissions

Process Measures

Body painting

Introduction of high-efficiency painting equipment

Improved methods for cleaning paint guns(combining pressurized air with thinner for cleaning)

Improved recovery of thinners for cleaning

Paint-drying ovens with exhaust treatment equipment

Parts painting

Use of powdered paint requiring no solvent for engine cylinder blocks

See

6

Rationalization of Water UseProduction processes necessarily usevarious kinds of water : industrial water,well water, tap water. Recognizing theneed to conserve valuable resources, eachplant has action plans for reducing andrationalizing its use of water from allsources.

33

Prevention of Water PollutionThe pollution load from wastewater fromproduction processes varies dependingon the process. Wastewater is first putthrough the appropriate primary andsecondary treatments before undergoingadvanced wastewater treatment (such asactivated carbon filtration) at a generaltreatment facility.The quality of wastewater discharged

into public systems is in accordance withvoluntary standards stricter than legalrequirements. Nitrogen, phosphorus,BOD*1 and COD*2 are continuouslymonitored. We have also taken steps todeal with emergencies, such as installingemergency water tanks. We are workinghard to prevent eutrophication*3 atclosed bodies of water (such as lakes,marshes and bays). Ways of doing soinclude the use of sub-materials forproduction that do not contain nitrogenor phosphorus, which causeeutrophication, and the establishment ofwastewater treatment facilities equippedwith denitrification systems.( p.1 Environmental data by plant)

Automatically monitoring nitrogen andphosphorus levels and discharging treatedwastewater

Bio-trickling filter treatment facility

Reduction of Noise and VibrationsCompressors, blowers, stamping andengine testing are major sources of noiseand vibrations. In order to reduce theeffects around such plants, less noisyequipment is increasingly employed,facility layouts are modified, buildingsare insulated, and other steps are takenas appropriate. Before constructing anew facility, simulations are run of noiseand vibrations at the boundaries, andproper measures are put into place.

Reduction of Bad OdorsCasting shops, painting lines andwastewater treatment facilities, etc. areall sources of bad odors. These smells aredealt with in various ways depending ontheir individual properties. Solutionsinclude activated carbon adsorption,afterburning (direct, catalytic andregenerative combustion) anddeodorization by chemical dosing. On aday-to-day basis, we are conductingpatrols and measuring odors on theboundaries of plant premises.

Notes

*1 : BOD (Biological Oxygen Demand)

*1:An indicator of water pollution that measures the amount of dissolved oxygen consumed by the oxidation and decomposition of organic matter (waste)

*1: by aerobic microorganisms in water over a certain period of time.

*2 : COD (Chemical Oxygen Demand) An indicator of water pollution that measures the amount of oxygen consumed by the oxidation of organic matter in water

*3 : EutrophicationOversupply of nutrients such as nitrogen and phosphorus in enclosed bodies of water such as lakes, marshes and bays results in an abnormal proliferation

of plankton and the occurrence of red and blue tide, which harms the fishing industry and reduces water quality by causing it to smell.

Deodorizing facility at a wastewatertreatment plant

Industrial wate47%

Well water18%

Tap water35%

4,928,000m3/year


See

60

40

30

50

20

10

0 ,95

,00

,03

BODCOD

(tons / year)

(FY)

,90

BOD and COD

8,000

6,000

10,000

4,000

2,000

0

Well water

Industrial water Tap water

,94

,95

,96

,97

,98

,99

,00

,01

,02

,03

(1,000m3 / year)

(FY)

Amount of water used, by category of water

Breakdown of water use in FY 2003

Noise-deadening wall

Logistics SystemMMC is actively developing anenvironmentally friendly logistics systemto improve transport efficiency and

Notes

*1 : Knockdown (KD) vehicles Vehicles exported in parts for assembly at local plants.

34

Logistics

Procurement logistics

Production Parts logistics

Built-up vehicles logistics

Service parts logistics

Transport of production parts manufactured by suppliers to plants or parts centers

Transport of production parts between plants

Transport of manufactured vehicles from plants to motor pools (storage yards and allocation hubs)Transport of vehicles from motor pools to dealers

Transport of service parts from parts centers to dealers

(1) Domestic logistics

(2) Logistics for exports

In addition to built-up (BU) vehicles, knockdown (KD)*1 parts and service parts are

exported from Japan.

Parts manufacturers

Procurement logistics

Production parts logistics

Parts sales companies

Built-up vehicles

Service parts

Motor pools

MMC dealers

PartsMMC plants

Parts centers

Built-up vehicles logistics

Service parts logistics

OverseasDomestic

Overseas MMC dealers

MMC plants

Parts centers

Overseas plants

Built-up vehicles

KD parts

Service partsOverseas parts depots

Motor pools

Measures to Improve Transport Efficiency (Reduction of CO2 Emissions)

MMC is promoting the followingmeasures to improve efficiency involvingbuilt-up (BU) vehicles (transport of BUfrom plants to Domestic dealers) in orderto reduce CO2 emissions:

“Modal shift“

Efficient use of trailers

Minimized idling

Joint transport with other manufacturersIn FY 2003, CO2 emissions duringtransport were down 1.7% from theprevious FY, to 43.61kg per unit (CO2

weight equivalent).MMC will continue these efforts

toward helping protect the environment.

2000 2001 2002

5,000

0

(FY)

(t-CO2) (kg-CO2 /unit)

10,000

15,000

20,000

25,000

42

40

44

46

48

50

Emis

sio

ns

per

un

it s

hip

ped

(lin

e g

rap

h)

2003

Tota

l em

issi

on

s (b

ar g

rap

h)

CO2 emissions during domestic transport ofBU vehiclesNote) Total emissions increased because more unitswere shipped.

reduce packing materials at the stagesof production, sale and service.


(2) More efficient use of trailersGiven also the easing of heightregulations on some parts of designatedtransport routes, further efficiency inloading vehicles will be pursued.

(3) Promotion of idling prevention, etc.

Regarding land transport, MMC aretaking steps to encourage fuel-efficientdriving by, for example, giving advice ondriving at economic speeds, andprohibiting sudden starting, accelerationand unnecessary idling. Loading tractors are in addition equipped

with digital tachographs*2 in order to raisethe efficiency of control of operationsand promote fuel-efficient driving.

(4) Expansion of joint transportation with other manufacturers

Steps are being taken to improve theefficiency of transportation in cooperationwith other manufacturers, such asthrough the reciprocal use of the returnlegs of transportation journeys on land.

835

Cab-over transporter

Notes

*1 : Modal shiftOptimized transportation by combining several means of transportation, in order to reduce the impact on the environment and to reduce transportation cost.

*2 : Digital tachographsDetailed data on driver operations (time, speed, distance, engine speed, etc.) are collected for analysis by computer to increase the efficiency of operations.

*3 : Returnable racks and boxesAfter unpacking at their destinations, the racks and boxes used for packing parts are folded up to between one third and one tenth of their original size and sent back to Japan.

(1) Promotion of “modal shift“*1

As part of our effort to develop a moreefficient transport system making bestuse of multiple modes of transport –principally trucks, ships and railways –we are promoting a switch from mainlyland-based to marine transport. All vehicles are now transported by seawhenever marine transport is possible.Rail transport is also being used in

certain regions where efficiency can beimproved.

Marine transport (Loading a special vessel)

Rail transport (vehicles being loaded)

Measures for Reduction of Packing and Packaging Materials

In order to reduce the use of packing andpackaging materials used in transportingproduction parts and service parts toproduction and sales affiliates, we aretaking steps such as the following:

(1) Increased use of returnable racks and boxes*3

In 2003 we introduced returnable racksand boxes for the transport of serviceparts to Australia, have expanded theiruse to KD parts to Thailand, and arecontinuing the expansion.

(2) Replacement of wooden with steel packing cases

Steel packing cases were introduced in2003 for transport of KD parts toColumbia and Korea in an attempt toreduce the use of wood.

(3) Simplification of packingWe are simplifying packing and reducingthe consumption of resources throughthe use of stretch film packing andreviews of packaging specifications.

(4) Partnership with Daimler Chyrsler The returnable racks used to ship serviceparts to Europe are then used forshipments from DaimlerChrysler (DC) inEurope to DC in Japan - saving resourcesthrough dramatically more efficient use.

KD parts packing Service parts packing

31%18%

Proportion of packaging materials returnable in FY 2003

Maritime transport routes


Tachograph

Sales of Low Emission Vehicles (LEVs)

In FY 2003, new models, such asGrandis, Minica and Airtrek, werelaunched. These models have all beencertified as ultra low emission vehicles(U-LEVs) under an LEV certificationprogram ( p.22) of the Ministry ofLand, Infrastructure and Transport.More than 95% of MMC-made gasolinevehicles sold in FY 2003 were LEVs.

Notes

*1 : LEV Certification System for Eight Local Governments (8LG LEV)A system of assessment and certification in accordance with MoE LEV exhaust emission guidelines operated by eight local governments in the Kanto region around Tokyo

(the prefectures of Tokyo, Kanagawa, Saitama and Chiba, and the cities of Yokohama, Kawasaki, Chiba and Saitama). Saitama City joined the scheme in April 2003.

*2 : LEV-6 (formerly the Low NOx Emission Vehicle Certification System of Six Local Governments)

A system similar to the 8LG LEV program run by six local governments in the Kansai region around Osaka (the prefectures of Osaka,

Kyoto and Hyogo, and the cities of Kobe, Osaka and Kyoto).

36


17.1

26.1

56.8

2002

48.1

12.0

20.6

19.3

4.3

12.7

2003

20

0

40

60

2001

80

100

(FY)

(%)

31.1

51.9

Ultra LEV Transitional LEVLEV Others

100

80

60

40

20

0N

um

ber o

f LEV-certified

vehicles

Number of 8LG LEV and LEV-6 vehicles (only passenger vehicles)

Eight local governments

LEV-6

: Decreased as a result of tightened standards by eight local governments

: Decreased as a result of tightened LEV-6 standards

: Decreased as a result of tightened standards by eight local governments

: Increased as a result of certified compliance with new long-term exhaust emissions regulations

1999 2000 2001 2002 2003 2004

Compliance with local government LEV certification schemes

MMC is taking active steps to reduceexhaust emissions and gain certificationunder the various LEV certificationschemes run by local governments. These include the 8LG LEV*1, LEV-6*2

and Tokyo LEV certification programs.

Expanding Use of clean energy vehicles (CEVs)

In order to promote the furtherdevelopment and spread of CEVs, theMinistry of the Environment (MoE), theMinistry of Economy, Trade and Industry(METI) and the Ministry of Land,Infrastructure and Transport (MLIT), inJuly 2001, issued a joint action planentitled “Clean Energy VehicleDevelopment and Propagation Action Plan.“This plan establishes a target of at least

ten million CEVs on the roads as soon aspossible but no later than FY 2010, andcalls for close collaboration on variousmeasures. The types of cars covered are :[1] Natural gas vehicles (CNG vehicles)[2] Electric vehicles[3] Hybrid vehicles[4] Methanol vehicles, and[5] Highly fuel efficient, low-emissioncertified vehicles, all of which arecovered by the Green Purchasing Law. Unit shipments of these vehicles in FY2003 are shown in the table below.

1:EVs, Hybrid vehicles, and Methanol vehicles weren’t shipped. 2:Vehicles meeting Energy Conservation Law fuel efficiency standards ahead of schedule and LEVs certified under the LEV certification program Certified LEVs (See p.38 regarding the certification standards for LEVs) 3:Include cars achieving 50% lower than new long-term regulations. 4:LPG vehicles are not covered by the Green Purchasing Law. 5:No sales in FY 2002.

Unit shipments in FY 2003 (figures in parentheses indicate percentage change on previous year)

Mini-carsMini-carsStandard and

small carsStandard and

small carsTotal

Certifiedhigh fuelefficiencyLEVs 2

Total

LPG vehicles 4

CEVs 1

Passenger cars Commercial vehicles

Ultra LEV 3

LEV

Transitional LEV

Natural gas vehicles24

(80%)

85,024(192%)

59,838( 5)

4,625 (21%)

6 (6%)

97,057 (137%)

0

0 0

1,497 (43%)

82,827 (190.5%)

7 (23%)

4,062 (262%)

162,678 (356%)

0 0

4,069 (257.9%)

203 (193%)

29,921 (189%)

36 (61%)

43,914(275%)

234 (142%)

7,351 (182%)

21,492 (54%)

0

0 58,764(98%)

6,149(24%)

42(25%)

227,867 (172.8%)

13,754( 5)

See

Exhaust emissionlevel

Name Displacement ( )

Ultra LEV

LEV

Transitional LEV

Grandis

Airtrek

Lancer

Lancer Cargo

Colt

eK-WAGON

Minica

2.4

2.0 / 2.4

1.5

1.5

1.3 / 1.5

0.66

0.66

Pajero

Diamante

Galant

3.0

2.5

2.0

Delica

Pajero Mini

1.8 / 2.0

0.66

: Includes cars achieving 50% lower than new long-term regulations


Proportion of gasoline vehicles sold that were LEVs

Major LEV carsNumber of LEV-certified vehicles

37

Notes

*1 : Dealer StandardsIn order to improve the quality of sales and the satisfaction of customers, standards are established so that customers can enjoy

consistently high-quality services from any MMC dealer anywhere in the country.

Environmental Role of DealersDealers not only sell vehicles, they also

Repair vehicles and replace parts, and

Take back ELVs for recycling.

Dealers thus play an important role inprotecting the environment and recyclingvehicles by collecting and recycling partsand appropriately disposing of industrialwaste and ELVs.MMC provide support for and seek to

raise the awareness of dealers throughoutJapan regarding environmental protectionactivities in order to raise theenvironmental performance of thecorporate group as a whole.

Categoriesof activityby dealers

Disposal of waste oil and parts

Collection of replaced bumpers*

Proper disposal of airbags*

See p.38-41 for details of vehicle recycling by dealers.

Treatment of wastewater at repair shops

Disposal of ELVs*

Collection of air-conditioner refrigerant*

Proper management of CFC coupons

Disposal of ordinary business waste

Compliance with PRTR law

Environmental management system

Establishment ofstructure and identificationof persons in charge

Attainment of management targetsfor categories of activity

Current situation

Determination of currentsituation and formulationof plan

Activity plan

Activities

Report andinspection

Review

Com

pany

-wid

e ac

tion

toac

hiev

e co

ntin

uous

impr

ovem

ent

Declaration onenvironmentalaction by topmanagement(president)

Environmental Action by DealersMMC believes it is important that dealersnot only meet environmentalrequirements, but establish andimplement measures to protect theenvironment and prevent emissions ofany kind having an adverse effect on theenvironment. “Dealer Standards“*1

issued in 2002 incorporates themanagement system shown below,under which MMC dealers workproactively on environmental matters.With the help of Mitsubishi Motors

Sales Association, MMC issued inDecember 2000 a manual for dealerstitled “Action by Dealers to Cope withEnvironmental Problems,“ showingdealers how to bring their environmentalactivities into compliance with ISO 14001standards. (Revised in January 2003)

Domestic dealers are making company-wide environmental action plans andcontinually reviewing them, clarifying theloci of responsibility under the strongleadership of their presidents.Dealers are also preparing to meet the

requirements of the AutomobileRecycling Law that will come into effect inJanuary 2005. ( p.38-41)

A manual for environmental activities “Action by Dealers to Cope with

Environmental Problems“

Measures Taken by Dealers(1) MMC dealersMMC dealers are constantly makingefforts to improve in areas such as therecovery of environment-impactingsubstances, management of waste andappropriate storage of replaced bumpersuntil they are transported to recyclingplants. ( p.40-41)They are also working diligently to obtain

environmental accreditations such as ISO14001 certification, and, in fact, the firstMMC dealer succeeded in doing so inJanuary 2004.

(2) Parts dealersAs parts dealers do not directly generateany industrial waste, the focus of theiractivities is on segregation wastes, etc. inthe office.

Appropriate storage of replaced bumpers

See

See

Outline of management systems of dealers


Vehicle recycling at presentCompared with other manufacturedproducts, a high proportion of vehiclesare recycled, and the recycling rate iscurrently almost 75-80%. However, theremaining 20-25% is buried orincinerated as shredder residue (ASR*1).Because of the shortage of sites fordisposal of industrial waste and the needto build a more environmentallysustainable society, further increasing therecycling rate is an important priority.Recycling is essential to get the

maximum benefit from resourcesconsumed during the vehicle lifecycle. MMC is taking active steps to recycle itsown end-of-life vehicles (ELVs) both inJapan and abroad.

Notes

*1 : ASR (Automobile Shredder Residue) Waste generated after vehicles are cut and crushed in industrial shredders and compactors, and useful materials, such as metals, are separated.

(Residue, primarily materials with lower specific gravity such as plastics, glass and rubber, is called shredder dust.)

*2 : Extended Producer Responsibility (EPR)The principle that producers of products have a responsibility not only for product performance, but also for the environmental impact of products from production through

to disposal. This includes responsibility in relation to the environmental impact of the choice of raw materials, production processes, use and disposal.

38

Recycling

Vehicle Recycling Systems in Japan and Europe

(1) JapanIn Japan, the Ministry of Economy, Tradeand Industry (METI) and the Ministry ofthe Environment (MoE) sponsored theEnd-of-Life Vehicle Recycling Law(hereafter referred to as the AutomobileRecycling Law), which will be fullyimplemented from January 1, 2005. Under the law, customers (owners of

vehicles), car manufacturers and otherparties each play an important role.

Customers will bear the costs forrecycling end-of-life vehicles – in theform of an obligation to depositrecycling fees – at the time ofpurchasing new cars (or, in the case ofexisting cars, when they are inspectedor deregistered). At the same time,under the principle of “extendedproducer responsibility“ (EPR),*2 carmanufacturers will be responsible,among other things, for appropriatelyremoving and recycling thefluorocarbons, airbags and shredderresidue from ELVs they produced.Through these arrangements, car

manufacturers are endeavoring to meetthe requirements of properly recyclingend-of-life vehicles and achieve a targetrecycling rate of at least 95% by 2015.

Vehicle dismantler

Recycled as used parts

20-30%Recycled as materials

50-55%Landfilling

20-25%

DismantlingELV

Shredding operator Industrial waste disposal operator

Shredding and sorting

Engine, tires, doors, electrical parts, etc.

Nonferrous metals, battery, etc.

Steel, nonferrous metals, etc.

Shredderresidue

Present stste of Recycling of ELVs

1. Prevention of illegal dumping

2. Continued recycling and appropriate disposal of ELVs

3. Minimization of landfill disposal

4. Establishment of mechanisms ensuring fair competition based on existing recycling system

Promulgationand entry into effect

Types of vehicle covered

Promulgate July 12, 2002To be fully enforced from January 1, 2005

Four-wheeled passenger vehicles and four-wheeled commercial vehicles(from mini-cars to large trucks and busses)

OutlineItem

Cost

Requirements for car manufacturers

- Collection and recycling of fluorocarbons, airbags, shredder residue (Destroying fluorocarbons)- Determination and publication of recycling fees- Design and manufacture of vehicles taking account of recycling and the environment - Provision of information on the construction, parts and materials of vehicles

To be charged to customers

Front bumper (plastic) bumpers, internal and external fittings, tool boxes, etc.

Tires (rubber) Cement feedstock and fuel, etc.

Engine (steel, aluminum) general steel products, aluminum productsCoolant (alcohol) auxiliary fuel for boilers and incineratorsWire harness (copper) copper products, etc.Battery (lead) batteriesEngine oil (oil) auxiliary fuel for boilers and incineratorsRadiator (copper, aluminum) brass/aluminum products

Body (steel) auto parts, general steel productsDoors (steel) auto parts, general steel products

Suspension (steel, aluminum) general steel products, aluminum products

Trunk lid (steel) auto parts, general steep products

Rear bumper (plastic) bumpers, internal and external fittings, tool boxes, etc.

Hood (steel) auto parts and general steel products

Seat (urethane foam, fiber) automobile noise insulator

Windows (glass) glass wool, etc.

Wheel (steel, aluminum) auto parts, general steel products, aluminum products Transmission (steel, aluminum)

general steel products, aluminum productsGear oil (oil) auxiliary oil for boilers and incineratorsCatalytic converter (precious metals) catalytic converters

Summary of Automobile Recycling Law

Basic concepts


Recycling uses of ELVs(Both diagrams prepared from the materials produced byJapan Automobile Manufacturers Association)

39

Notes

*1 : ART (Automobile shredder residue Recycling promotion Team)In order to carry out the smooth, efficient, appropriate recycling of shredder dust, MMC and seven other car manufacturers

(Isuzu Motors Ltd., Suzuki Motor Corp., Nissan Motor Co., Ltd., Nissan Diesel Motor Co., Ltd., Fuji Heavy Industries Ltd.,

Mazda Motor Corp. and Mitsubishi Fuso Truck and Bus Corporation) formed ART in January 2004.

Regarding hazardous substances,mounted bodies on commercial vehiclesand motorcycles, which are not subjectto the Automobile Recycling Law, firmsin related industries will be takingvoluntary action in parallel withmeasures to comply with the AutomobileRecycling Law when it comes into effect.

MMC cooperates with the JapanAutomobile Manufacturers Association(JAMA) in developing mechanisms for,

Hazardous substances

- Publication of numerical reduction targets (for lead,mercury, cadmium and hexavalent chromium)

- Applied starting with new models covered by law- R&D on alternative technologies

Item Outline

Motorcycles

- Establishment of collection points and resource recovery facilities- Free collection of vehicles with recycle mark- Reduction of use of hazardous substances

Mountedbodies ofcommercialvehicles

- Promotion of easy-to-recycle designs- Reduction of use of hazardous substances- Promotion of recycling and appropriate disposal

of materials difficult to recycle and process - Establishment of network of businesses

participating in disposal and resource recovery

for example, the depositing of recyclingfees and handling of electronic manifestdata ( p.40), and helping carowners and others involved in vehiclerecycling (those engaged in sales,maintenance, dismantling and scrapping)by providing staff from its companiesand sharing some costs.MMC and seven other companies

formed ART*1 to establish standards andmethods for handling shredder dust, andto develop facilities for recycling it. Usingthe advantages provided by collaborationwith other companies, MMC is trying toreduce disposal costs and achieve recyclingtarget rates as quickly as possible.Additionally, vehicles are, in the

development stage, designed forrecycling and for the reduction ofhazardous substances ( p.25-26),and MMC participates actively inrecovering and recycling the parts ofend-of-life vehicles ( p.40-41).

(2) Europe (EU)After issuance of the Directive by theEuropean Parliament and Council on Endof Life Vehicles (2000/53/EC) in October2000, domestic laws were enacted inmost EU countries. In partnership withDC, MMC is working on complying thelegal requirements of each EU countryand on a system for efficiently takingback and recycling all ELVs.

Promulgationand entryinto effect

Types ofvehiclecovered

- Promulgated October 2000- Enactment of legislation in EU member states in 2002-2003

Item Outline

- Passenger cars with seating capacity of 9 or less- Commercial vehicles with gross vehicle weight

of 3.5 tons or less

Cost Cost borne as a rule by car manufacturers

Requirementsof carmanufacturers

- Establishment of ELV collectionand recycling network

- Prohibition of use of hazardous substances (lead, mercury, cadmium, hexavalent chromium)

- Recyclability rate of 95% or more

See

Car

man

ufa

ctu

res

and

imp

ort

ers

(ap

pro

ved

)(r

esp

on

sib

le f

or

recy

clin

g t

hem

selv

es o

r o

uts

ou

rcin

g t

o o

ther

s)

shredding operator (licensed)

Fund managing corporation

End owner

Fluorocarbons collector (registered)

Dismantler(licensed)

New vehicle owner

Collector (registered)(vehicle dealer or garage)

Bill for payment

Markets for serviceable parts useable metals, etc.

Reused parts, etc.

Metals, etc.

ELV

Recycling fee

Duty to hand over, receive

Payment

ELV Duty to hand over, receive

ELV Duty to hand over, receive

ELV shell

Flow of ELVs

Flow of money

Duty to hand over, receive

Duty to hand over, receive fluorocarbons

Duty to hand over, receive airbag

Duty to hand over, receive shredder residue

Japan Automobile Recycling Promotion Center

An interim entity with limited responsibility

Japan Auto Recycling Partnership

ASR recycling promotion team

(ART*1)

Automobile deregistration under the Road Transport Vehicle Law

Information management centerJapan Automobile Recycling Promotion Center

Flow of information (Report by electronic manifest)

Entrusted

Cooperation

Customers

MMC

Outline of Automobile Recycling Law (Based on Government’s Materials)

Summary of voluntary measures

Summary of EU ELV Directive


See

See

Measures by Dealers(1) Collection of car air-conditioner

fluorocarbonsCFC-12*1 used to be the refrigerant incar air conditioners, but now the CFCsubstitute HFC-134a*2 is used.MMC took the following actions to

deal with CFC-12, which destroys theozone layer:

Halted use of CFC-12 in production

vehicles by January 1994;

Provided all its dealers with equipment for

collecting and recycling CFC-12; and

Developed, with its partners in the

industry, a system for collecting and

destroying surplus CFC-12.

These measures were completednationwide in October 1998.In order to prevent further globalwarming, MMC has introduced car airconditioners that use only minimalquantities of HFC-134a refrigerant aswell ( p.21).MMC complies with the Law on

Collection and Destruction ofFluorocarbons that came into effect inOctober 2002. In order to fulfill theirobligations under the law efficiently andat low cost, car manufacturers jointlyconsign collection and destructionoperations to the Automobile RecyclingPromotion Center.MMC has provided its dealers withequipment to collect HFC-134a. All dealers are registered as collectors

Notes

*1 : CFC-12 (chlorofluorocarbon)It not only destroys the ozone layer, but has a substantial greenhouse effect (about 7,100 times that of CO2).

*2 : HFC-134a (hydrochlorofluorocarbon)It does not destroy the ozone layer, but is a greenhouse gas (about 1,300 times the effect of CO2).

*3 : ManifestsThese are documents that clearly record the receipt of waste and identify responsibility for disposal, as stipulated in the Waste Disposal Law. A vehicle that may have outlived

its original purpose, however, is not treated as waste as long as it is in economic circulation as useful parts, and requires no manifest.

40

permitted to receive and deliverfluorocarbons (i.e., can deal with ELVswith air conditioners), and 151 out of185 dealers are registered asfluorocarbon collectors (i.e., can removefluorocarbons from ELVs).

(2) Collection and recycling of flaresIn cooperation with its partners inindustry, MMC established in April 2002two routes for the nationwide collectionand recycling of flares whose use-by-date has expired and that have beenreplaced by dealers.

(3) Management by manifest*3

In the case of waste generated bydealers, the dealers are required to issuewritten (paper) manifests*3 for control ofthe waste up to final disposal.

Under the Automobile Recycling Law, anelectronic manifest system, replacing thepaper manifests, is employed, enablingclose, appropriate management betweenparties handling ELVs, fluorocarbons,airbags and shredder dust. MMC isworking with related industries inestablishing a system using electronicmanifests.

Development of Technology for Recycling ELVs

Wire harnesses for vehicles are made ofcopper, which, if processed togetherwith the iron of an ELV, would be animpurity in the recycled iron. MMC is now working with vehicle

dismantlers on how to make removal ofthe harnesses easier before recyclingELVs into iron.

Harness dismantling test

Collection of fluorocarbons

Dea

ler

Co

llect

ion

ag

ent

(fl

are

man

ufa

ctu

rer)

Rec

ycle

r

Part

s d

eale

rs

Route A

Route B

ELV manifestManifest for

shredder residue

Was

te p

rod

uce

r(d

eale

r, e

tc.)

Dis

po

sal c

on

trac

tor

(sh

red

der

, etc

.)

Hau

lage

con

trac

tor

(dis

man

tler

, etc

.)

End

dis

po

ser

(lan

dfi

ll si

te, e

tc.)

DealerCollection

Transportingcompany

Collection and transportation

High-pressure gas

UserRequesting disposal

Empty containers

Fluorocarbons

Empty containers

Fluorocarbons

Plant to destroyfluorocarbons

Each car manufacturer Japan Automobile Recycling Promotion CenterContract

ContractContract

Fluorocarbons collection and destruction system

See


Routes for collection and recycling of flares

Current path of manifests

Others

Collection and Recycling of Parts(1) Collection and recycling of

bumpersIn the past, the waste bumpers producedwhen dealers repair vehicles wereshredded and disposed of in landfills. Inorder to reduce the amount of wastegenerated by dealers and to make moreeffective use of resources, however,MMC began collecting and recyclingpolypropylene waste bumpers replacedby dealers in May 1997. In FY 2003, atotal of 72,918 bumpers were collectedfrom dealers around the country.The bumpers collected were processed

into pellets by resin recyclers afterremoving impurities such as metalbrackets, and recycled into auto parts byparts makers. Recycled bumper materialsare presently used for a whole range ofplastic parts, including battery cases,wheel house covers, center ducts, fillerneck protectors, and so on.

(2) Use of recycled partsSome parts that have been replaced bydealers, such as engines, transmissionsand power steering gearboxes, arerebuilt to make them as good as newand then sold. As part of our ongoing look for ways to

expand the range of parts recycled andto meet user needs and reduce theamount of waste produced by dealers,we added turbochargers in July 2003.

(3) Sale of used partsAs part of its efforts to promote theeffective use of resources, we havelaunched a scheme for recycling reusableparts from ELVs around the country, saleof which began in July 2002. Customerssearch for recycled parts via a recycledparts network accessed at dealers, andcan have their vehicles repaired usingthe used part of their choice if available.

Smoother TrafficIn Japan, about 11% of automobile fuel iswasted due to traffic congestion.This could be alleviated through improvedITS ( p.7) with consequent fuel savingsand comparable CO2 emissions reductions.ITS embrace a range of intelligent

transport concepts and some of thetechnologies are currently still at the R&Dstage. Devices such as car navigationsystems, VICS*1 and ETC*2 contribute tooptimizing driving routes and shorteningdriving times. MMC vehicles incorporate car navigation

systems compatible with VICS and ETC,facilitating the wider use of ITS. MMC isinstalling VICS-capable car navigation andETC systems on new Grandis models.

Environmental Activities in the OfficeMMC makes continuous efforts in the office to promote energy conservation,resource recovery and various otheractivities. The “green purchasing“ rate ofoffice supplies at the head office increasedfrom 58% in FY 2001 and 49% in 2002 to65% in 2003, showing the steady, gradualeffect of activities within the company.In FY 2003, consumption of paper

increased in conjunction with relocationof the head office in May. MMC willstrengthen management to reduceconsumption of paper and increase theproportion of use of recycled paper.

Dealers and main repair workshops

(690)

Collection contractors

Resin recyclers

Resin parts manufacturers

Battery cases, wheel house covers,

etc.

Examples of use

20

0

40

60

80(1,000 bumpers)

2002 2003(FY)

1999 2000 2001

Examples of use: center duct (left), filler neck protector (right)

Notes

41

2001 2002

100

50

0

200

150

300

250

400

350

(FY)2003

(tons) Recycled paper

288.8

79%

249.9

356.4

96% 76%

Paper use and rate of use of recycled paper


Collection and recycling of bumpers

Number of bumpers collected Recycled bumpers

See

*1 : VICS (Vehicle Information and Communication System)

*2 : ETC (Electronic Toll Collection)

Reestablishing Business EthicsSince the recall problem in 2000, MMChas been working hard to reestablishbusiness ethics and to act on theirprinciples, issuing the document “MMC’sBusiness Ethics” and other efforts. It is,however, regrettable that the investigationin 2000 did not cover the appropriateperiod or scope, and that we had toimplement additional recalls in 2004 dueto information on defects before 1998.This was because we had not properlyfollowed the company’s regulations orreviewed employees’ awareness of thoseregulations, allowing the situation to occur– something that disappointed and lost usmuch of the confidence of our customersand the public. Having reflected humblyon all that has happened,

Social ActivitiesSocial /EconomicsActivities

Business Ethics


Safety and Quality

Welfare Vehicles / Relations with Local Communies



we, the employees of MMC, aredetermined to do even more than wehave been doing, and to reform thecorporate climate.In FY 2004, we introduced a system to

complete the reform (the Business EthicsCommittee, the CSR*1 Promotion Officeand the Business Revival Committee),making compliance with laws andcorporate ethics the company’s toppriority. According to the schedule below,we are determined to cause ourcompany’s new basic principles of“compliance first,” “safety first” and“customers first” to be thoroughlyrecognized by all employees. To reflectthe view of society, the Business EthicsCommittee consists of learned outsidepeople and outside experts / specialists.

Business Ethics

42

Evaluating the state of awareness by Business Ethics Committee

End of October 2004

Presenting oaths by all employees

End of September 2004

Written oaths presented by all executives

“Corporate Ethics Compliance First” Declaration by Chairman and PresidentJune 29, 2004

Reestablishing business ethics: organization, systems, regulations

Holding seminars on business ethics for all executives

Holding meetings in each business unit to review ethical problems

Survey on awareness of business ethics for all employees

Issuing Business Ethics Compliance Promotion Plan for 2005

July 2004

July / August 2004

July / August 2004

September 2004

November 2004

June 29, 2004

CSR Promotion Office

Business Ethics Committee

Board of Directors

CEO

COO

Corporate General Manager

General Manager

Office Compliance Officer

Presenting opinions

Business Ethics Committee

CBEO (Chief Business Ethics Officer)

CSR Promotion Office

Compliance Department

Help line

Internal support

Employees

Gui

danc

e /

advi

ce

Measures for thorough compliance with business ethics

Handling ethical issues

Thorough compliance with business ethics

Cou

nsel

ing

Cou

nsel

ing

General manager : Appointed within a department as a code leader to clarify responsibilities for thorough compliance with business ethics. In each office, an “office compliance officer“ was newly appointed to assist the corporate general manager in achieving compliance with business ethics.

Outside support

Notes

*1 : CSR (Corporate Social Responsibility)

*2 : ComplianceActing not only in conformity to laws, international rules and company regulations, but to what is generally

deemed reasonable by the standards of society.

Work Schedule to Promote Compliance*2

Compliance*2 System

Improving Awareness and the Sharing of Information through Education and on the Company’s Homepage

Training seminars in business ethics areconducted for new employees, and foremployees at various levels of experienceand responsibility. In addition, in FY 2003,the following seminars were conducted :

In October 2003, a homepage devotedexclusively to compliance with businessethics was created on the company’sIntranet, allowing employees to shareexperiences and information.

43

Efforts to Promote Compliance with Business Ethics Since 1999

(1) Issuance of “Business Ethics of MMC“March 1999 (revised in October 2001)

This describes specific concepts andbehaviors and is intended to provideguidelines for employees in conformingtheir business activities to what isdeemed fair and reasonable by thestandards of society – doing so with thelaw-abiding spirit that is the basicprinciple for individuals and corporationsin the modern world. We work continually to enlighten

employees on compliance with thesebusiness ethics, using this document andthe following complementary materials:

“Guidelines for Observing the Anti-

Monopoly Law“

“Manual for Managing

Confidentiality“ and

“Handbook for Preventing Sexual

Harassment“

Establishment of Systems to Promote Business EthicsAppointed a Chief Business Ethics

Officer (CBEO*1) (November 1997)

To reestablish business ethics and promote their practice, and to make the responsibilities and accountability of top management clear. Established a Business Ethics

Committee (January 1998)

To determine policies and measures for the promotion of business ethics.Introduced a system of “code leaders“

(December 2001)

To further instill ethical values in every employee.

(3) Establishment of a Help Line to Encourage Self-Correction

Social Activities ENVIRONMENTAL SUSTAINABIL ITY REPORT 2004

A personnel representative offers counseling on an various problems, including complaints aboutworking conditions and other difficulties.

1. Employee Counseling Office established in September 2000

2. Counseling Corner established in September 2001

3. MMC Hot Line established in April 2004

An industrial counselor assists individual employees primarily with personal mental issues.

Attorneys take consultation from professional point of view.

Targets Objectives

Heads of business units

Code Leaders

Fostering awareness of roles and responsibilities

Upgrading skills to cope with various business ethics-relatedissues

Notes

*1 : CBEO (Chief Business Ethics Officer)

*2 : CodeRefers to a code of ethics, rules and norms.

Code*2 Leader System

Heads of business units (departments and offices)

are responsible for instilling compliance with ethics in

employees of their units. “Code Leaders”

are appointed by the unit heads to support them to

ensure implementation. Code Leaders lead activities to

diffuse business ethics within their units with authority

and responsibilities designated by those heads,

work directly to establish business ethics

in the workplace.

The Compliance Officer is appointed by the

CBEO to assist the CBEO in operating the

Code Leader System.

Code Leader training seminars

Outline of Help Line System

Outline of MMC Business Ethics

. To observe laws and ordinances, corporate rules and social rules.

. To improve communication with customers and society.

. To maintain fairness, justness and transparency of business activities.

. To create working environment where human rights are respected and every employee can be fully motivated and demonstrate competence.

. To aim at co-existence and co-prosperity with the society.

Social Activities

44

Customer Advice CenterProviding a convenient point of contactfor any inquiry, the Customer AdviceCenter has been in operation since 1968. The customer-satisfaction efforts arethen classified into two major categories:

Customer communications

Customer’s voice cycle


Customer CommunicationsOur objective is to respond to everyinquiry promptly, appropriately and withkindness. Customers want satisfaction;we want them to be more satisfied thanthey expected.Since October 2003, the Customer

Advice Center, which had been closedon Sundays, has been operated sevendays a week (except 12/31 – 1/3). Forcustomers’ further convenience,coordination has been improved, as well,with affiliated dealers open on Saturdaysand Sundays.

Customer’s Voice CycleOur “Customer’s Voice Cycle“meansthat comments from customers on ourproducts and services are fed back to therelevant departments in the company,responses are sent to the customers, andopinions are reflected, as appropriate, infuture products and services.We value our customers’ thoughts and

views, and make sure they are conveyedto the right people within the company.In the end, they help us create productsand services that better satisfy thepublic’s expectations.

Customer Advice Center

0120-324-860 (Toll free)

Time : 9:00 - 17:00 (Saturdays / Sundays / holidays : 9:00 - 12:00 and 13:00 - 17:00)


0

10,000

20,000

30,000

40,000

FY 1999 FY 2000 FY 2001 FY 2002

50,000

60,000

70,000

80,000

90,000

100,000

OtherMail

E-mailTelephone

183 295 279 3282,687 3,031 1,983 1,672

1,006 1,447 4,392 5,642

55,549 83,305 64,484 76,613

FY 2003188

1,2135,163

75,382

59.425

88.078

71.138

84.25581.946

(No.)

Listening to Customers‘ Voices

Depending on the nature of the matter and the number of comments, themost effective manner of internal dissemination is determined to effectively dealwith the substance of the issue.

“Customer‘s voice“ reports

“Customer‘s voice“ system

Customer voice mail

“Customer‘s voice“ meetings

Information sheets on “customers’ voices“

Reported to senior management monthly

The system allows business units to search“customers’ voices“ whenever necessary

Information mainly on productacceptance is consolidated intoa e-mail magazine and distributed to employees

Meetings among different units to consider face to face whatcustomers are saying

Comments from customers are sent in real time to relevant business units

Customers‘ Voices

Relevant business unit & dealer

Products

“Customer‘s voice“

“Customer‘s voice“

“Customer‘s Voice Cycle“

Services

Customer


Inquiries Received

Customer‘s Voice Cycle

Automobile Information for Schoolchildren

Every year since 1993 we have provideda limited-time, toll-free telephoneinformation service for schoolchildren –something unique in the auto industry. “Information for Children“ on ourwebsite (Japanese) underwent a majorrenewal in March 2004 with the additionof an environmental page called “Let‘sProtect the Global Environment!“ There,the complex connections betweenautomobiles and the environment areexplained in an easily understoodmanner.We do other things, as well, to

acquaint children with the automobileindustry, such as presenting lessons intheir classrooms on car manufacturingand the environment. ( p.16)

http://www.mitsubishi-motors.co.jp/

CHILD-SAFETY/child/

45

Pamphlets

See


Disseminating the “Voices“In addition to sharing comments asdescribed above, presentations on theCustomer Advice Center are made forexecutives, and multiple seminars areheld every year to collectively exposeemployees from the quality, productionand development sectors to the “Direct

Opinion Seminar“ of customers.

Enlightened Safe DrivingBasic information on safe driving isavailable continuously on our websiteand in pamphlets distributed by ourdealers. The website‘s “Child Safety“page is especially popular with customerswho have children.

Direct Opinion Seminar

Automobile information service for schoolchildren

0120-175-250 (Toll-free) (for a limited time only)

Mitsubishi Auto GalleryThe Mitsubishi Auto Gallery opened in1989 at MMC‘s Passenger Car R&DCenter in Okazaki City, Aichi Prefecture,giving the public as well as employees anup-close look at the development of MMCpassenger cars over the years. Models ondisplay include the very first one : the“Mitsubishi Model A,“ from 1917. Over150,000 people have visited since thegallery was created.

Motor SportsMitsubishi is a famous name on theinternational rally stage - perhaps mostof all in the Paris-Dakar Rally and theWorld Rally Championship (WRC).Experience gained under the most

grueling conditions is then reflected innew and refined technologies forvehicles marketed around the world.

Please apply for admission before your visit. Open : 08:15 - 17:15 Closed : Sat. / Sun. (also closed for several days in May, August and during the year-end / New Year’s period) Inquiries and reservations : Development Planning Department Research & Development Office 1, Aza Nakashinkiri, Hashime-cho, Okazaki, Aichi 444-8501, Japan TEL : 0564-32-5204

Pamphlets

http://www.mitsubishi-motors.com/

corporate/about_us/kids/e/2004 winner of the Paris-Dakar Rally,Stephane Peterhansel (right)

WebWeb

Homepage Homepage “Kids‘ Square“

46

Safe VehiclesThe greatest responsibility of any automobilecompany is to provide safe vehicles to itscustomers. We test the safety of our vehiclesthroughout their development throughsimulations and crash tests, all of which haveled to development of MMC‘s RISE*1 body.Our designs incorporate measures not onlyto protect drivers and passengers, butpedestrians in the event they are struck.

In our pursuit of the safe vehicles of thefuture, we produce test vehicles for theASV*3 project and are continuing our studyof safety measures making use of ouradvanced technology.

Safety and Quality

Quality Policy and Quality Management System

Our basic quality policy is : 1. Raise customer satisfaction through

products and services2. Make every employee responsible for

quality3. Improve operational and product

quality through MMDS*4 implementation.and is predicated on these principles.In 2003, MMC obtained company-wide ISO 9001: 2000 certification, aninternational QMS (Quality ManagementSystem) standard, establishing amanufacturing system that creates productswhich meet customer needs andconsistently verifies the system is functioningproperly. (All plants have already acquiredISO 9002 : 1994 certification.) An internalquality audit system is also part of ourongoing effort to improve QMS.MMDS is a process management system

that utilizes “quality gates“( p.19) to solve problems comprehensively throughenhanced interdepartmental coordination,has facilitated the production of high-qualityproducts from the eK Wagon to the Colt,Grandis, among other new models, and hascontributed to improving product quality.

Recall Notification Once MMC officially notifies the Ministryof Land, Infrastructure and Transport, wepromptly inform owners by direct mail(DM) through our dealers regarding thenature of the recall and how to obtainfree repair or remedy.In addition, recall information is also

posted on our website and customerscan determine whether their vehicle issubject to a recall simply by conducting asearch based on entering the vehicleidentification number.

Safety WarningsSince we want our customers to drivetheir vehicles safely and comfortably,items related to potential driver orpassenger injury are clearly identified inowner’s manuals with color andprominent markings.

Warning Caution(Stop dangerous behavior)

MMC is giving its full attention to safetyby informing our customers.

Courses in Safe Driving : Kuruma-no Gakko (“Car School“ )

Vehicle safety is important in reducing accidents, of course, but so is safe driving. As one part of itseffort to promote safe driving, MMC and itsdealers offer courses to new drivers about twentytimes a year for a fee of only 1,000 yen. Courses are held at driving schools and in dealer

parking lots, and cover the basics of safe driving,vehicle inspection, parking in a garage, actual on-street driving, and more.

Offset crash test*2 (Grandis)

Notes

*1 : RISE ( Reinforced Impact Safety Evolution )A reinforced body with an high-energy-absorbing front end and strong passenger compartment.

*2 : Offset crashThis is a front-end crash in which 40 percent of the width of the vehicle (on the driver‘s side) strikes a barrier. It is more damaging than a simple head-on crash

*3 : ASV (Advanced Safety Vehicle)A research project toward an advanced safety vehicle promoted by the Ministry of Land, Infrastructure and Transport.

*4 : MMDS (Mitsubishi Motors Development System)A management tool for new model development projects

Recall Information Flow

Colt ASV-3

Parking

MMC website

MMC Dealer Owner

DM

Telephone

VisitRecall-related documents (such as request for work)

Posting recall information

Searchable

Checkup

See

Social Activities

Activities with Local Communities

MMC plants strive to deepen ties to theirlocal communities and residents throughfactory tours and programs for localeducational institutions

Mizushima Plant WebsiteAnnounces activities in the localcommunity and company events, andaccepts reservations for factory tours.

http://www.mitsubishi-motors.com/corporate/about_us/profile/mizushima/j/

47

“Hearty Run“ SeriesOur “Hearty Run“ series of welfarevehicles embodies the concept of drivingin close companionship with others.Primarily passenger cars, they areequipped with devices to meet a widerange of special needs - for those inwheelchairs, or the disabled, or thosewho, such as the elderly, may otherwisebenefit from extra convenience ingetting in or out of a car. In May 2003 a new Grandis model with

a movable, revolving passenger seat wasadded, bringing still further ease of entryand exit, and in October a new “self-transporter“ Lancer joined the lineup.

To allow users to see vehicles andequipment at firsthand, MMC haspermanent showrooms and takes anactive part in events around the countrysuch as exhibitions and test-driving events.

“Self-transporter“ model of Lancer

Community Cleanup and Tree-Planting Activities

All plants organize their own cleanupactivities to clean up nearby public roadsand rivers (such as the Yahagi River,Tenjin River and Takahashi River) everymonth, or take part in cleanupcampaigns organized by localgovernments, in order to keep localcommunities clean.

Exterior Wall PaintingsIn May 2003, people from localeducational facilities created colorfulpaintings on a 170-meter-long concretewall north of the main building of theMizushima Plant.

Regional Volunteer ActivitiesAn acting troupe called Kuruma-za - “cartheater“ - organized among volunteersfrom the Mizushima Plant performs athealth centers for the elderly and similarfacilities three times a year . . . earningrave reviews.

Visit to a welfare facility

Welfare Vehicles Relations with Local Communities

Factory tours- Tours open to local residents, schools and company groups, etc. (all plants) Total participants in FY 2003 : 22,700

Cooperation with schoolsNagoya Plant- Participates in various school events as an advisor to a local committee on social education- Holds a baseball camp once a year for junior high schools in the cityPowertrain Plant- Provision of instructors to high schools- Environmental education class at an elementary schoolMizushima Plant- Work experience for junior and senior high school students, etc.- Donation every year of varicolored carp raised at plant on treated wastewater to elementary schools. (in FY 2003, 55 carp to four schools)

Opening of company facilities to the public- Gyms and sports grounds, etc. (all plants)- Grounds open to the public for cherry blossom viewing (6,000 visitors)

Promotion of road safetyNagoya Plant- Donation of equipment such as convex traffic mirrors to promote road safety- Provides guidance on road safety on school-commuting routes

Participation in local neighborhood associations

Sponsorship of festivals and other events- Participates in port festivalFamily festivals at all plants

Participation in and donation to environmentaland other groups- Registered for Okazaki workplace environment ISO- Industrial conference on cleaning the Mimuro and Tenjin Rivers- Citizens’ fund for Okayama Mori-zukuri (forestration)- Sponsorship of “International Orchid Show Okayama” and others

Permanent showrooms Locations

Mitsubishi Auto Garden Tama

Mitsubishi Auto Garden Osaka

1-16-1 Karakida, Tama-shi, TokyoTEL : 042-337-8860

7-20-1 Fukushima, Fukushima-ku, OsakaTEL : 06-6453-3961

Wheelchair model

Boarding assistance model

Assisted-driving model

Revolving passenger seat model

Moving passenger seat model

Possible to get in and out while in a wheelchair

Fitted with passenger seat that rotates and slides out from the car to make getting in and out easier

Fitted with electrically-powered passenger seatthat rotates and in and out of the vehicle to makegetting in and out easier

Assisted-driving modelStorage of a wheelchair can be accomplished by the flip of a switch.Special controls allow the disabled to drive by themselves.

Minicab van and Townbox

eK Wagon, eK Classy, Colt and Dion

eK Wagon, eK Classy,Dion and Grandis

Lancer

Web

Grandis with movable, revolving seat

Latest information is available at http://www.mitsubishi-motors.co.jp/japan/heartyrun

Outline of Hearty Run series

Web

Painting on the wall


48


(3) Positive healthIndividual health is an individualresponsibility. To make it easier foremployees to stay healthy, variousprograms and support are offered.

Voluntary proactive health-management campaignsConsultations with hygienists and dieticians Guidance on health management ; physical strength tests ; other

(4) Mental healthWe also make it easy for employees toseek advice on mental-health issues.

On-site visits by psychiatrists and counselorsTelephone counselingSeminars on stress-management and mental health (management training)

Prevention of Sexual HarassmentAny sexual harassment is a violation ofbusiness ethics ( p.43), and MMCgoes to great lengths to make sureeveryone understands this. Seminarshighlight issues and facilitate importantlessons taking root. Regulations providefor punishment of offenders.

Personnel (1) Policies and PrinciplesBasic personnel policies at MMC haveundergone fundamental changes. Inparticular, traditional approaches toassignments and rewards have beenreplaced by an emphasis on currentperformance in personnel evaluations,promotions and pay. The new system wasapplied to management-level employeesfrom April 2002, and was expanded tocover all ordinary employees (non-managerial) in April 2003.

(2) Professional DevelopmentChanges in personnel management andadministration were accompanied by anew internal educational systemintroduced in April 2004, placing agreater emphasis on motivatingemployees to seek out new knowledgeand skills.

Employee WelfareTo enable employees to work with peaceof mind, the company offers - in additionto child-care leave and family care leave -volunteer leave and a “cafeteria plan“ offree welfare services that employees canselect for their particular needs.

Climate in the WorkplaceThe company works hard, together withemployees themselves and with theirlabor unions, to make the workplace apositive, open environment wherecommunication flourishes.

Health and Safety(1) Occupational Safety Safety comes before all else. Safetymanagement and accident preventionprograms are diligently practiced andcontinually improved. For while MMC‘ssafety record is above average in theindustry, we want it to be even better.

(2) Road safetyIn order to minimize traffic accidentsinvolving employees, safe-drivingcourses, general inspections of vehiclesused for commuting, and hazard-awareness tests are offered. In addition,in order to raise safety awareness,employees are required to report anytraffic accidents in which they areinvolved.

See

Injuries at MMC

Notes

*1 : Frequency rateThe frequency rate is the number of industrial injuries per million hours worked, and indicates the frequency of injuries.

(Frequency rate = number of industrial injuries ÷ total hours worked × 1,000,000)

30

20

10

0

0%

0.5%

1%

1.5%(FY)1999 2000 2001 2002 2003N

um

ber

of

inju

ries

(b

ar g

rap

h)

Freq

uen

cy r

ate

(lin

e g

rap

h)Automobile industry average

MMC

- Respecting individuals

- Enhancing skills and employability

- Being a learning-oriented organization

- Challenge (strong Will) “Stretch toward lofty goals“

- Change (higher Skill) “Keep up with innovation“

- Career (independent Mind) “Self-activate and find satisfaction“

Philosophy of Education The 3 Cs

Policy on Professional Development

Category Priority focus

Safetymanagement

Roadsafety

Sanitation

Otheractivities

(1) Eradication of unsafe behavior

(2) Comprehensive prevention of similar accidents

Details

- Enforcement of safety duties of managing supervisors- Thorough education in safety fundamentals (rules and behavior)- Promotion of safety dialogue

- Proper implementation of steps to prevent similar accidents

- Support for council activities and safety activitiesof individual companies

- Thorough onsite fire control

- Promotion of health and safety managementbefore dispatch and at destination

- Promotion of improvement of workand working environment

(3) Continuous improvementof intrinsic safety of equipment

(4) Guidance on safety managementfor onsite partners, etc.

(1) Thoroughgoing steps to prevent roadtraffic accidents

(1) Promotion of cleanand comfortable working environment

(2) Promotion of measures to preventdiseases and promote positive health

(1) Fire prevention

(2) Promotion of health and safety measuresfor employees sent overseas

- Improvement of safety of existing / remodeled equipmentand new / transferred equipment

- Promotion of voluntary and regular inspectionsof mechanical equipment

- Promotion of mental health- Active promotion of activities to prevent diseases

- Thorough guidance on road safety, including safetyin employees’ private lives

- Thorough prevention of onsite vehicle accidents

Health and safety measure

Social Activities

49

(¥ billion)

-3.7

11.9

54.3

Operating profit(consolidated)

0

(FY)200120001999 2002 2003

-100

-80

-60

-40

-20

20

40

60

80

100

-94.0 -110.3

(¥ billion)

Net income(consolidated)

0

(FY)

-100

-80

-60

-40

-20

20

40

60

80

100

(¥ billion)

Ordinary profit(consolidated)

0

(FY)

-100

-80

-60

-40

-20

20

40

60

80

100(¥ billion)

Sales(consolidated)

(FY)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

3,3353,277 3,201

3,885

2,519

-23.3

200120001999 20032002

-215.4-278.1

200120001999 20032002

-73.9

-96.9

200120001999 2002 2003

11.3

37.4

22.5

40.2

82.8


Non-consolidated Consolidated

Sales

Operating profit

Ordinary profit

Net income

Sales volume

Employees

¥1,421 billion

¥29.7 billion

¥21.2 billion

-- ¥213.1 billion

767,000

13,727

¥2,519.4 billion

-- ¥96.9 billion

-- ¥110.3 billion

-- ¥215.4 billion

1,509,000

43,624

Performance in FY 2003Consolidated sales in FY 2003 stood at2,519.4 billion yen (down 35.1% from ayear earlier). Consolidated sales wouldhave declined 7.9% if the 715.3 billionyen effect of the spin-off of the truckand bus business in the previous FY andthe 433.4 billion yen effect of thechange in the accounting term ofconsolidated subsidiaries overseas wereexcluded. An operating loss of 96.9 billion yen

(down 179.6 billion yen from theprevious year) was posted because of afall in the number of vehicles sold, itselfthe result of tougher sales competitionand stricter credit standards, an increasein sales promotion expense,

Performance in last 5 years

and an addition to bad debt reserve forsales finance, etc., despite improvementsachieved through cost reductions andthe foreign exchange effects relating tothe euro. (The decline was 180.8 billionyen with the exclusion of the 8.8 billionyen effect of the spin-off of the truckand bus business and the negative 10.0billion yen mpact of the change in the

accounting term of consolidatedsubsidiaries overseas). An ordinary loss of110.3 billion yen (down 164.6 billion yenfrom the previous year) was recorded.(The effect of the change in theaccounting term of consolidatedsubsidiaries overseas was negative 13.1billion yen.)


Notes : Truck and bus businesses were included until FY 2002.

The effect of a change in accounting period for MMC’s consolidated overseas subsidiaries was included in FY 2002.

50

Appendix

1991 1991

1992 1992

1993

1994

1995 1995

1997 1997

1998 Completion of nationwide system for collection and destruction of CFC-12 refrigerant used in air conditionersAbolition of use tetrachloroethene and dichloromethane chlorine cleaning ageAir-cleaner case made from waste paper developed and used in some new modelsDevelopment of easy-to-recycle TEO weather strip suitable for all vehicles

1998

Approximately 20% reduction in use of HFC-134a refrigerant in air conditioners Launch of collection and recycling of old bumpers replaced by dealersIntroduction of cogeneration system at Kyoto Plant

1997

1999

2000

2001 2001

Corporate Activities Production / Recycling Activities Advanced TechnologiesYear

Naturally colored resin door garnish developed and used on new-model passenger carsEmissions of waste for landfill disposal eliminated at the Nagoya and Kyoto PlantsDevelopment of air-cleaner case made from waste paper and recycled polypropylene (recycled PP)

Eclipse EV prototype driven publicly around Shikoku, going more than 400 km on a single chargeTotal production of GDI engines passes million mark

2002 Establishment of Recycling Promotion Office MMC Environmental Sustainability Plan announced (medium-term action plan)

2002 Emissions of waste for landfill disposal eliminated at the Tokyo and Mizushima Plants (all domestic plants have now achieved zero landfill emissions)Agreement on promotion of partnershipwith DaimlerChrysler in Europeanrecycling business

2002 Eclipse EV entered in “Shikoku EV Ekiden“ and successfully driven from Tokyo to Niihama, Shikoku – charged three timesResearch to reduce noise from tires during motion wins JSAE‘s Asahara Award for the Promotion of ScienceNew Colt is first MMC car to be certified as a U-LEV

2003 Truck and bus division spun off from MMC as Mitsubishi Fuso Truck and Bus Corporation (MFTBC)ISO 9001:2000 certification acquired (quality management system)

2003 Start of construction of new paint using water-based paints at Mizushima Plant (operation scheduled in FY 2004) Development of world’s first canister case made using recycled cropped material

2003 Concept test car “i“becomes first vehicle to earn highest rating of five stars for both emissions and fuel economy in FIA EcoTestFuel cell vehicle “MITSUBISHI FCV“(MFCV) certified by the Ministry of Land,Infrastructure and Transport

2004 MFCVs serve as escort cars at Osaka International Ladies Marathon

Plastic parts weighing at least 100g marked with identifying code

Energy-saving, ultra-lean-burning MVV engine announced

Introduction of cogeneration system at Oye Plant

Announcement MIVEC and MIVEC-MD engines combining high fuel economyand high-powerCNG Libero cargo (natural gas vehicle) goes on sale

MMC Environmental Plan formulated andBasic Philosophy on the Environment establishedMMC Environmental Council established

Elimination of CFC-12 refrigerant from air conditioners in all new models and switch to HFC-134a for all veehiclesLaunch of moves to reduce use of lead in new modelsCFCs (fluorocarbons) entirely eliminated from production processesIntroduction of technology to strip paint from plastic parts in order to promote recycling

Elimination of 1.1.1-trichloroethene totally from all production processes

Development and announcement of world‘s first high-fuel economy, high-power gasoline direct injection (GDI) engine

Libero electric vehicle goes on general saleLaunch of moves to reduce use of lead in new models

First “Plant Environmental Topics“ published for distribution to suppliers, etc. (twice a year)Environmental Liaison Council established to liaise between main affiliates and members of the MMC Group

Announcement of MMC‘s voluntary ELV Recycling Action Plan Nagoya, Kyoto and Mizushima Plants acquire ISO 14001 certification

Establishment of Environmental Affairs Department (Current Environment & Recycling Affairs Department) MMC Environmental GuidelinesFirst MMC Environmental Report

Launch of Green Procurement (suppliersrequested to cooperate in environmental activities)Development of environmental management systems for dealers

GDI engine wins JSME’s prize and JSAE’s Technological Development AwardCNG Minicab van goes on sale

MVV engine fitted as standard in all mini-cars built under the new mini-car standards

1998

1994

1996 Announcement of vehicles powered by GDI engines (Gallant , Legnum)

1999 New Pajero model fitted with direct injection diesel passenger car engineDevelopment of Pistachio GDI-ASG vehicle (automatically stops idling)

2000 New Lancer Sedia and other models fitted with GDI-CVT

1996

-200

020

01-2

004

1991

-199

5

History of Environmental Activities Major Events, Efforts and Technologies from the 1990s to the Present

(2) View of the report and environmental protection activities

0

Econom

ic ac

tiviti

es

Envir

onmen

t

man

agem

ent

Develo

pmen

t and

desig

nPr

ocure

men

t

Producti

on

Use o

f pro

ducts

Logist

icsSa

les

Recyc

ling

Envir

onmen

t

prote

ction in

the o

ffice

Socia

l acti

vities

No

. of

resp

on

ses

Areas of interest Further information desired

0

10

20

30

40

50

70

No

. of

resp

on

ses

Quantity of information Quality of information Comprehensibility Number of pages Compared with previous editions60

MMC’s environmental activities

Thank you for your interest in this Environmental Sustainability Report 2004.

We value you’re comments, which will help us make future reports better and more useful.

We would be grateful, therefore, if you would take a moment to complete the short questionnaire on the other side of this page, and then detach it

and send it to us by fax or mail

Questionnaire Results for the Environmental Sustainability Report 2003A total of 63 questionnaires on the Environmental Sustainability Report 2003 (issued on July 10, 2003) were returned (as of July 2004).

(1) Areas of interest and areas regarding which further information was desired (multiple answers allowed)

We would be very grateful if you would take a few moments to. Please complete the questionnaire and return it by mail to :

MITSUBISHI MOTORS CORPORATIONEnvironment & Recycling Affairs Department2-16-4 Konan, Minato-ku, Tokyo 108-8410 Japanby fax to : +81-3-6719-0034

10

20

30

40

50

Lack

ing

Pass

able

Pass

able

Good

Unsatis

facto

ry

Satis

facto

ry

Easy

to u

ndersta

nd

Avera

ge

Difficu

lt to

under

stand

Too m

any

Just

right

Too fe

wBet

ter

No chan

ge

Worse

Good

Avera

gePo

or

MMC Environmental Sustainabil ity Report 2004 QuestionnaireYour cooperation in completing this questionnaire is very much appreciated.

Mitsubishi Motors Corporation : Environment & Recycling Affairs Department　FAX : +81-3-6719-0034

Q1. What is your overall opinion of this year’s report?□ Very easy to understand □ Fairly easy to understand □ Average clarity □ A bit difficult to understand

□ Very difficult to understand

Q2. How much did you read?□ About 1-10 　□ About 10-20 pages　□ About half　□ More than half　□ Nearly all

Q3. What in the report were you interested in, and what areas would you like to see improved in future issues? -Corporate Profile / □ Interested in □ Hope to see improved (　　　　　　　　　　　） Editorial policy

-Executive Messages 　　　 □ Interested in □ Hope to see improved ( )

-Environmental Topics in 2004 □ Interested in □ Hope to see improved ( )

-Business Policy □ Interested in □ Hope to see improved ( )

-Environmental Management □ Interested in □ Hope to see improved ( )

-Research and Development □ Interested in □ Hope to see improved ( )

-Procurement □ Interested in □ Hope to see improved ( )

-Production □ Interested in □ Hope to see improved ( )

-Logistics □ Interested in □ Hope to see improved ( )

-Sales / Use of Products □ Interested in □ Hope to see improved ( )

-Recycling □ Interested in □ Hope to see improved ( )

-Others □ Interested in □ Hope to see improved ( )

-Social and Economic activities □ Interested in □ Hope to see improved ( )

Q4. How would you evaluate our activities to reduce adverse environmental effects?

□ Good □ Fairly good □ Average □ Not very good □ Poor

Q5. Please tell us what activities you would like to see MMC undertake in the future in order to further reduce effects on the environment.

( )

Q6. In what capacity did you read this year’s report? (Multiple answers allowed)

□ Customer 　□ Supplier □ Shareholder or investor □ Environmental officer at a company or other organization

□ Environmental NGO / NPO □ Research / educational institute, etc. □ Student 　　 □ Media organization 　　

□ Government agency 　　 □ Financial institution □ Resident living near MMC　

□ Employee (or family member) of MMC or affiliate □ Others ( )

Thank you for completing the questionnaire. We would be very grateful if you would also provide

the following additional information about yourself :

Name Sex Male Female Age

Address -

Email:Tel

Fax

Place of work

or school, etc Car used Mitsubishi Other

Your opinions, comments and personal information will never be used for purposes other than creating a better MMC Environmental Sustainability Report, or in analysis of responses to the questionnaire. Information will be strictly maintained and managed, and data will not be made public in any manner that identifies individuals.

Please specity:

Please specity:

Environmental Considerations in the Preparation of this Environmental Sustainability Report

Paper certified by FSCThis report is printed on paper certified by the FSC (Forest Stewardship Council), an international NGO. Paper certified by the FSC is made from trees harvested from so-called “recycling-oriented forests,“ which are well managed and protected from illegal cutting ; trees are cut only in quantities necessary, and effects on natural ecology around such forests are minimized.

MMC endorses such “recycling-oriented forest“ activities and believes a first step toward a sustainable society is the use of FSC-certified and recycled paper for appropriate purposes in a balanced way. MMC uses FSC-certified paper for its environmental pamphlets ( p.15) and vehicle catalogues, in addition to this environmental report.

Ink / PrintingThe printer of this report has ISO 14001 certification, uses soybean oil ink and prints without water.

Comparison with the Ministry of the Environment‘s “Environmental Reporting Guidelines“(FY 2003 Version)

Items in Guidelines

Basic items

Preface by CEO

Basic requirements in reporting

Business outline

Summary of policies, goals and results of environmental considerations in business activities

Policies on environmental considerations

Summary of policies, goals and results of environmental considerations in business activities

Material balance of business activities

Summary of environmental accounting information

State of environmental management

State of environmental management system

State of supply chain management, etc., friendly to the environment

State of research and development of new technologies, etc., friendly to the environment

State of disclosure of environmental information and environmental communications

State of observance of environment-related regulations

State of environmental contributions to society

Environmental stress by business activities and state of activities to reduce it

Total amount of energy input and measures to reduce it

Total amount of materials input and measures to reduce it

Total amount of water input and measures to reduce it

Emissions of greenhouse gases and measures to reduce them

Amounts emitted and movement of chemical materials, and status of control efforts

Total production of products or sales

Total emissions of waste, etc., final disposal of waste, and measures to reduce them

Total amount of wastewater discharged and measures to reduce it

State of environmental stress involved in transport and measures to reduce it

State of green purchasing and measures to promote it

Environmental impact of products and services through their lifecycles, and measures to reduce it

State of social activities

State of social activities

Third-Party ReviewAll information in this MMC report was carefully examined prior to publication by people inside company, with best efforts to ensure its neutrality and the reliability of the report. It has been suggested, however, that a third-party review could further improve that neutrality and reliability. In order to ensure the neutrality and reliability of the third-party review itself, the company has undertaken various studies of the form, etc., of such a review, and will consider introducing such a review after receiving the results of those studies.

Relevant major pages

See

FSC - JPN - 0008FSC Trademark 1996 Forest Stewardship Council A.C.

Inside cover, p.1, p.15, Questionnaire, Back cover

Inside cover, p.4-5, p.10, p.49-50

p.2, p.6

p.2-3, p.8-9

p.18

p.16-17

p.7, p.11-14, p.16, p.28

p.27

p.19-26

p.11-13, p.15-16, p.44-45, Questionnaire

p.14, p.31-33

p.15-16, p.47

p.28-29

p.30-31

p.33

p.32

p.31

p.36, p.49

p.30-31

p.33

p.34-35

p.27, p.36

p.19, p.37-41

p.42-48

p.2

ead-0408

Mitsubishi Motors Environmental Sustainability Report 2004

Published : August 2004 The next report will be issued around the summer of 2005.

InquiriesMitsubishi Motors Corporation : Environment & Recycling Affairs Department2-16-4 Konan, Minato-ku, Tokyo 108-8410, JapanTel : +81-3-6719-4207Fax: +81-3-6719-0034

This report is waterless-printed on FSC-cerified paper with soybean oil ink.

At least 30% of the fibre used in the manufactur-ing process of this product comes from well-managed forest independently certified according to the rules of the Forest Stewardship Council.

30% Minimum

SGS-COC -1429FSC Trademark © 1996 Forest Stewardship Council A.C.

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