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Mitsubishi Motors Announces Results for First Quarter Fiscal 2005

Tokyo, August 2, 2005 — Mitsubishi Motors Corporation (MMC) today announced its results for the first quarter of the 2005 fiscal year (ending March 31, 2006).

[ Presentation slides ( PDF, 12pages, 806KB ) ]

  1. First quarter overview

    Mitsubishi Motors consolidated net sales for the first quarter of fiscal 2005 totaled 485.8 billion yen, down 71.8 billion yen from the same period last year (557.6 billion yen). The decrease is due chiefly to lower sales volumes in markets such as North America.
    The company posted an operating loss of 13.8 billion yen, an improvement of 17.9 billion yen over the same period last year. This improvement stems from cost reductions that outpaced the slower sales stated above. Reductions in costs included lower depreciation costs, as a result of asset write downs taken during the last financial year, lower sales expenses, mainly advertising, in the U.S., and lower warranty costs.
    MMC posted an ordinary loss of 20.0 billion yen, an improvement of 19.0 billion yen over the previous year, and a net loss of 21.6 billion yen, an improvement of 33.1 billion yen. The strong improvement in net loss stems partly from the elimination of the extraordinary losses booked last year, including restructuring costs in Australia and losses from the cancellation of a new model development program.

  2. Sales volume

    Sales of Mitsubishi Motors vehicles on global markets in the first quarter of fiscal 2005 totaled 326,000 vehicles, a decline of 12,000 on the 338,000 sold during the same period last year.
    In Japan, MMC sold 48,000 vehicles, a decline of 1,000 over the same period last year. Month-on-month sales volume was down in April but rose in May and June, which indicates a firm tone to the recovery in sales.
    In North America, Mitsubishi Motors sold 41,000 vehicles, a decline of 12,000 over the same period last year. While sales of the new Eclipse launched on May 19 have exceeded expectations, overall volume has been impacted by the reduced fleet sales.
    In Europe, the Company sold 66,000 vehicles, an increase of 8,000 over the same period last year. Factors contributing to the higher sales include the introduction of new 3-door and turbocharged Colt models in March this year, together with robust sales in Germany, the U.K. and other established markets as well as in Russia and other growth markets.
    In Asia and other regions, Mitsubishi Motors sold 171,000 vehicles, a drop of 7,000 over the same period last year. Higher sales in Oceania and Latin America failed to counter a downturn in China and other markets.

  3. Mitsubishi Motors Revitalization Plan progress report

    (1) Financial results
     
  4. Net sales in the first quarter of fiscal 2005 attained a level equal to approximately 50% of the 980 billion yen 2005 first half forecast.
     
  5. Operating loss, ordinary loss and net loss in the first quarter were all less than 50% of first half forecasts, which shows steady progress.
     
    (2) Sales volume and outlook
     
  6. Global sales volume in the first quarter of fiscal 2005 topped 50% of the 647,000 first half forecast.
     
  7. First quarter sales volume in Japan came in slightly below 50% of the first half forecast but month-on-month figures for May and June were up over last year. This and figures for July that put volume nearly at 130% of that for same month last year are a clear indication of a firm recovery in sales.
     
  8. First quarter sales volume in North America also came in slightly below 50% of the first half forecast. The company expects volume to increase in the second quarter and beyond with sales of the new Eclipse already doubled the sales target in June and with the launch of a new sales finance joint venture with Merrill Lynch in July.
     
  9. First quarter sales volume in Europe, Asia and other regions topped 50% of the first half forecast. Volume continues to grow smoothly, particularly in Europe and Australia.
     
    (3) Operational measures
     
  10. New model introductions
    May 2005: New Eclipse launched in the U.S.
    August 2005: New pickup truck for Thailand.
    September 2005: New Lancer Evolution Wagon for Japan.
    October 2005: New Outlander SUV for Japan.
    New Raider pickup for the U.S.
    New 380 sedan for Australia.
    January 2006: New concept i minicar for Japan.
     
  11. Tie-up strategies
    June 2005:
    • The Company started to supply additional minicar model to Nissan Motor under a new OEM agreement.
    July 2005:
    • The Company signed basic agreement with PSA Peugeot Citroen covering OEM supply of a new SUV model.
    • Sales finance joint venture with Merrill Lynch started operations in the U.S.
    • The Company started sales of MMC brand cars in Malaysia through a new company established by Mitsubishi Corporation.
        The Company is also preparing to strengthen its partnership with South East Motor and Hunan Changfeng Motor as part of its operational strategy in China.
  12. Summary

    Given the first quarter results and the progress made in the operational measures laid out in the Mitsubishi Motors Revitalization Plan, as described above, the Company believes it has made an acceptable start to achieving its announced forecasts for fiscal 2005. With this in mind MMC leaves the first half and full-year forecasts for fiscal 2005 announced on May 23, 2005 unchanged.

Note on forward-looking statements
This document contains forward-looking statements about Mitsubishi Motors Corporation's plans, strategies, beliefs and performance that are not historical facts. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industries in which Mitsubishi Motors Corporation operates, management's beliefs, and assumptions made by management. As the expectations, estimates, forecasts and projections are subject to a number of risks, uncertainties and assumptions, they may cause actual results to differ materially from those projected. Mitsubishi Motors Corporation, therefore, wishes to caution readers not to place undue reliance on forward-looking statements. Furthermore, Mitsubishi Motors Corporation undertakes no obligation to update any forward-looking statements as a result of new information, future events or other developments.

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