Mitsubishi Motors Corporation (MMC) has reported that its annual loss has more than doubled to a record as sales dropped every month in the fiscal year ended in March 2005. The thumping loss was in line with market forecasts.
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MMC’s loss increased to 474.8 billion yen ($4.4 billion) in the year ended March, from a loss of 215.4 billion yen in the previous year. Sales slumped 16 percent to 2.12 trillion yen from 2.52 trillion yen. The company had forecast a loss of 472 billion yen on sales of 2.04 trillion yen.
While other Japanese carmakers are a picture of success in overseas markets, MMC is struggling to revive its damaged brand following a series of recalls and the arrests of former executives after it concealed safety-related defects from authorities.
President Osamu Masuko, appointed since Mitsubishi Motors’ $5.2 billion financial bailout in January, has been trying to repair the carmaker’s reputation, develop new models and improve sales.
The company expects a loss in the current fiscal year of 64 billion yen on sales of 2.22 trillion yen.
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By GlobalDataGlobal sales fell 14 percent last year to 1.313 million vehicles, with volumes in Japan plunging 37 percent to 227,000 units.
“We want to recover the 300,000-unit level (for domestic sales) during the 2006/07 business year,” Hiizu Ichikawa, managing director in charge of finances, told a news conference, Reuters reported.
MMC received a $4.8 billion bailout from the Mitsubishi group, investment funds and others last year, and another lifeline totalling $5.25 billion early this year to shore up its balance sheet and develop new cars, Reuters said.
Mitsubishi Motors included forecasts for fiscal 2005 in the Mitsubishi Motors Revitalization Plan (“Revitalization Plan”) published on January 28 this year. The company has recently revised for certain regions the sales volume plans on which those forecasts were based to reflect changes in the business environment and market vitality since then. The company now plans global sales volume for fiscal 2005 of 1,370,000 vehicles, an increase of 57,000 over the previous year and 10,000 vehicles more than the Revitalization Plan forecast.
Mitsubishi Motors forecasts the following regional sales volumes for fiscal 2005. Japan: 253,000 vehicles, an increase of 26,000 over the previous year and 29,000 more than the Revitalization Plan forecast; North America: 184,000 vehicles, an increase of 10,000; Europe: 254,000 vehicles, an increase of 13,000 (forecasts for North America and Europe remain unchanged from those in the Revitalization Plan); Asia and other regions: 679,000, an increase of 8,000 over the previous year and 19,000 fewer than the Revitalization Plan forecast.
Mitsubishi Motors forecasts total sales for fiscal 2005 of 2,220.0 billion yen, an increase of 97.4 billion over the previous year and 190 billion yen more than the Revitalization Plan forecast. This revision has been made primarily to reflect the fact that the company’s European production subsidiary NedCar, which the company had been planning to unconsolidate, will now remain a consolidated affiliate, and to reflect upwardly revised sales volume plans.
Mitsubishi Motors earnings forecasts for fiscal 2005 remain unchanged from those in the Revitalization Plan. The company forecasts a full-year operating loss of 14 billion yen, an improvement of 114.5 billion yen over the previous year, a full-year ordinary loss of 40 billion yen, an improvement of 139.2 billion yen, and a full-year net loss of 64 billion yen, an improvement of 410.8 billion yen.
