Mitsubishi Motors Corporation (MMC) has today (5 February) announced a strong turnaround for its first nine months on the back of higher sales in Europe and Asia as well as favourable exchange rates.
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The Japanese manufacturer, which has been recovering after a series of damaging product recalls in Japan and declining sales in the US, said that consolidated net sales in the first nine months of fiscal 2007 reached JPY1.947 trillion (US$18.085bn), a 26% increase year on year.
“The market is difficult for everyone but we managed some quite good results,” Mitsubishi Motors Europe spokesman Daniel Nacass told just-auto today.
However, the company was forced to revise its full year sales forecast as the economic slowdown in key markets such as the US continued to bite and as a result of restructuring costs related to the closure of the production facility in Australia, which was also announced today during a results presentation in Japan.
The company posted a nine-month operating profit of JPY52bn, JPY45.6bn better than the same period last fiscal year. Factors contributing to this improvement included a significant upturn in sales volume and a more profitable model mix in Europe, Asia and other regions, and the benefits of a weaker yen, the company said in a statement.
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By GlobalDataThe company moved into the black in terms of net income, reporting a net profit of JPY21.7bn yen, a year-on-year gain of JPY33.5bn that would have been greater but for increased tax expenses due to increased profits at its overseas consolidated subsidiaries and other minor expenses.
Global retail sales of vehicles in the first nine months of fiscal 2007 totalled 1,016,000 vehicles, a 13% increase of 117,000 on the 899,000 sold in the same period in fiscal 2006.
However, in its home market of Japan, Mitsubishi Motors sold 151,000 vehicles, an 11% decline of 19,000 vehicles. The company said that registered vehicle sales increased due to the introduction of the new Delica D:5 and Galant Fortis (new Lancer in overseas markets) models, but these failed to offset a drop in minicar sales in a domestic market that still shows no sign of recovery in overall demand.
In North America, the company sold 134,000 vehicles in the nine months from April through December, up 11,000 over the same period last year.
However, sales in the US for October through December were down 3,000 units year-on-year, impacted by increased competition stemming from growing uncertainty about the future of the US economy due to the sub-prime loan problem.
In Europe, Mitsubishi Motors sold 254,000 vehicles, a 23% year-on-year growth in volume of 48,000. This gain was attributable to strong sales of the new Outlander and new Lancer, with the fast expanding Russian, Ukrainian and other east European markets acting as the main engine driving the growth.
In Asia and other regions, MMC sold 477,000 vehicles, up 77,000 over the same period last fiscal year.
“This gain was due to continued firm sales of the Triton pickup truck and the Pajero in Latin America, the Middle East and Africa and to a sales recovery in Indonesia and other countries in the ASEAN block,” said the company.
In its statement, Mitsubishi Motors said it had revised its full-year forecasts for fiscal 2007 to reflect the current sales environment and the restructuring costs related to the closure of the production facility in Australia.
The company has revised its full-year global retail sales volume forecast to 1,337,000 vehicles, a reduction of 25,000 on the figure announced in October 2007, on the basis of current market trends.
The company has reduced its full-year net sales forecast to JPY2,670bn, JPY30bn less than the October forecast, to reflect the impact of the revised sales volume forecast.
But a statement said: “Despite these downward revisions, however, the company upwardly revises its operating income forecast by JPY10bn to JPY80bn and ordinary income forecast by JPY13bn to JPY60bn as it expects to make up the drop in sales as a result of favourable changes in exchange rates, mainly the euro, and through cost reductions.”
Mitsubishi Motors left its full-year net income forecast of JPY20bn unchanged as it expects to make up extraordinary losses incurred through the closure of its production facility in Australia by raising the profitability of its operations.
