Mitsubishi Motors on Thursday said it lost JPY63.8bn (US$543m) in its fiscal half-year to the end of September, although that was about a third of the JPY178.8bn loss reported a year ago.

Fiscal first-half sales fell 7% to JPY991.3bn from JPY1.07 trillion in 2004, The Associated Press (AP) reported.

Losses were reduced in the first half because of the absence of one-time costs charged the previous year for free vehicle inspection programmes to win back customer trust and clean up its image [after a lengthy series of recall scandals], the report noted.

Mitsubishi Motors has seen its sales in Japan plunge after acknowledging five years ago that it had systematically hidden vehicle defects for more than two decades to avoid recalls, The Associated Press added.

Since then it has announced a string of recalls, including recalls for the same vehicles recalled earlier. In a further embarrassment, the cover-ups have continued even after executives had repeatedly promised to come clean, the news agency said.

For the full year ending March 31, 2006, Mitsubishi Motors is expecting to post a JPY64bn loss on JPY2.22 trillion sales, unchanged from its earlier forecast, The Associated Press said.

The company reportedly said that, although sales are coming back, other uncertainties remain, such as the prospects for the overall US car market and soaring oil prices. It also left unchanged its global vehicle sales projection for the full year at 1.37m vehicles.

For the first half, Mitsubishi sold 659,000 vehicles around the world, up 2% from 646,000 the same period for fiscal 2004. Vehicle sales were up in Japan, but fell in North America, mainly on rental fleet sale declines. Sales also grew in Europe, driven by strong sales in Russia and Germany.

Mitsubishi Motors added it was on a solid track to achieve a turnaround, noting that its first half sales were above its own forecast, and its losses were below projections, The Associated Press said.