Mitsubishi Motors Corporation (MMC) has revised its full fiscal year 2008/9 forecasts down from previous estimates announced last 30 October to reflect “consolidated results for the first nine months and the prevailing sales climate”.
MMC is now forecasting a full-year net loss of JPY60bn yen as a drop in ordinary income is compounded by costs “expected to be incurred in re-evaluating the company’s production facilities in light of falling production volumes, as well as costs expected to be incurred in streamlining functions and reassessing staff levels in line with sales volume”.
The automaker expects demand to fall further in its markets world-wide due to the impact of the global financial turmoil and the continuing economic slowdown, and has cut its full-year global retail volume forecast by a further 178,000 units to 1.05m vehicles.
The full-year net sales forecast is down JPY350bn to 2.01 trillion yen due to the revised sales volume and foreign exchange rate forecasts.
Operating income for the year is now seen at JPY5bn, JPY45bn less than the 30 October estimate, to allow for the expected drop in sales volume and for a further appreciation in the value of the yen. The forecast includes reductions in sales and marketing expenses as well as various cost reductions, MMC said.
The ordinary income forecast is down JPY63bn to JPY20bn to allow for the lower operating income expected and factors in the negative impact of reevaluation of the company’s loans to affiliates due to the yen’s appreciation.
Nine-month consolidated net sales to 31 December fell 15% year on year to 1.658 trillion yen as sales fell and the high yen rate hit.
Operating profit fell JPY32.1bn to JPY19.9bn as cost-cut gains and reductions in fixed costs due to restructuring started last year were offset by the higher yen, the drop in sales and raw material cost increases.
Ordinary income fell JPY34.6bn to JPY4.7bn due mainly to the reduced operating profit, unfavourable foreign exchange rates and a decline in investment profits at affiliated companies.
The automaker posted a net loss of JPY4.8bn, down JPY26.5bn, due mainly to the drop in operating income and despite gains stemming from lower tax expenses.
Amid the worldwide drop in demand, global retail sales of Mitsubishi vehicles in the first nine months of the fiscal year fell 17% to 848,000 vehicles.
Japanese sales fell 19% to 122,000 vehicles, North American sales were off 22% to 97,000 vehicles and European sales slipped 8% to 232,000 vehicles though MMC noted the slowdown in sales in western European countries became more pronounced last summer and have remained sluggish since then. They also began, from early autumn, to fall in emerging countries including Russia and Ukraine which, it said, “had until recently served as the engine driving growth in the region”.
In Asia and other regions, MMC sales fell 19% to 397,000 vehicles despite gains of more than 20% in Indonesia, the Philippines and Brazil.
The fluctuation in sales volume within the Asean block included a 52,000 unit decrease stemming from the completion of the contract under which MMC supplied Proton with production parts and components for assembly in Malaysia.