Tokyo: Japan’s Mitsubishi Motors Corp posted a quarterly loss on Thursday as car sales plunged, and it kept its annual profit forecasts, relying on emergency cost reductions.
Mitsubishi Motors, maker of the Pajero sport utility vehicle, had been counting on its big presence in Russia and Ukraine to drive vehicles sales growth, but it has had to alter its strategy after demand collapsed in those markets since late last year.
Mitsubishi Motors’ sales declines have been so sharp that it now ranks No. 7 among Japan’s eight listed carmakers, outselling only Fuji Heavy Industries Ltd’s niche Subaru brand. Just two years ago, it was Japan’s fifth-largest automaker.
President Osamu Masuko conceded earlier this year that deep cost-cutting measures were the main hope for improving profits, rather than growth in vehicle sales or revenue.
In the April-June quarter, Mitsubishi Motors had an operating loss of ¥29.6 billion ($312 million), swinging from a profit of ¥9.86 billion a year earlier. That was in line with an average estimate of two analysts polled by Thomson Reuters for a loss of ¥26 billion.
Its first-quarter net loss was ¥26.4 billion, compared with a profit of ¥10.3 billion last year. Revenue sank 58% to ¥259.1 billion, as global retail sales slid 32% to 213,000 units in the quarter.
For the financial year to March 2010, Mitsubishi Motors kept its operating profit forecast at 30 billion yen and its net profit forecast at ¥5 billion.
Shares of Mitsubishi Motors were up 4.2% at ¥175 in afternoon trade, extending gains after the results.
The stock has risen 39% so far this year, underperforming Tokyo’s transport subindex, which gained 45% in the same period.