| Mitsubishi reports loss of over £2.4 billion, expects growth from new launches |
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For more than a year now, sales figure of Mitsubishi Motors Corp. reflect a major downturn. With net losses doubling to £2.4 or $4.4 billion, the automobile giant has been severely affected with sales plummeting by more than a third in two major markets, Japan and the United States.
Predicting a tough road ahead, it further forecasts sales of 2.2 trillion yen generating loss of 64 billion yen for the fiscal year, March 2006.
"We faced unprecedented financial risk in the last fiscal year, driven by massive vehicle quality problems," Mitsubishi Motors' chief financial officer, Hiizu Ichikawa, told reporters in Tokyo on Monday.
Mitsubishi Motors is indefatigable in its efforts to revive its brand image, as since past five years, it is known to “systematically hide auto defects to avoid recalls”. The worse hit region being its own homeland, sales in Japan plunged to 37% to 227,000 cars and trucks for the fiscal year which ended in March. In United States, sales have been reducing swiftly as the auto conglomerate has halted car loans since two years to customers with weak credit.
However, inspite of such circumstances, Mitsubishi Motors did not sink due to the two major multibillion –dollar bailouts. It received a $5.2 billion bailout from Mitsubishi Heavy Industries and another from the leading bank, Mitsubishi Tokyo Financial Group.
Though the eminent carmaker has not lost hopes, it does warn of the immediate loss in the present financial year before it can proclaim profits in March 2007, anticipating earnings of 8 billion yen (73.9 million) in the next fiscal.
With an optimistic bent of mind, the carmaker confidently relies on new models to recoup sales in United States and Japan. The launch of the new fourth-generation, Eclipse sport coupe, almost a month back is supported with upbeat campaigns which synchronizes with the "Japan cool" fad fueled by edgy Japanese animated films and videogames.
North America also hit badly, due to massive discounts and sales to fleet offered by the company, it now intents to launch six models within the span of three years.
To continue working on its growth plan, the company will introduce a new Raider mid-size pickup. But the forth-coming Eclipse convertible to be launched early next year follows Spyder roadster, a seven-seater Outlander sport utility vehicle and of course the new Lancer, which is in the pipeline in 2007.
Amidst all this, the only region that the auto manufacturers can boast of is Europe, where sales soared to 13 %.
"We're going to rebuild this brand product by product," exclaims Executive Vice President for Mitsubishi Motors North America Inc., Dave Schembri.
With increasing trend in sinking sales, analysts opine that Mitsubishi cannot count on more bailouts and success of new models is important.
"The new strategy is going to be about the car as the star," says the US operations Head of Mitsubishi. "It will be a much heavier focus on the product. As we rebuild the brand, it will be one product at a time."
Posted
on : Tue, 24 May 2005 20:15 GMT | General News
By : Chris Rowe
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