Economy, Auto

Mitsubishi Earnings Improve

Mitsubishi Earnings Improve Mitsubishi Earnings Improve

Mitsubishi Motor Corp.’s operating profit surged nearly fivefold in the latest quarter, rebounding from a year earlier when earnings were broadsided by a fuel economy scandal.

Operating profit soared to 20.72 billion yen ($184.4 million) in the Japanese carmaker’s fiscal first quarter ended June 30, from 4.62 billion yen ($41.1 million) a year earlier, according to Automotive News Asia.

Net income rebounded from a loss the year before, climbing to 22.97 billion yen ($204.5 million), from a loss of 129.72 billion yen ($1.15 billion) the previous April-June period, Mitsubishi CFO Koji Ikeya said Tuesday while announcing the Japanese carmaker’s earnings.

Results also improved over the previous year because profits were further depressed then by one-time outlays to cover the cost of recovery defective Takata airbags.

Mitsubishi targets savings of 25.0 billion yen ($222.5 million) in the current fiscal year through closer coordination with its new partners.

Mitsubishi admitted last year to cheating on fuel-economy ratings for several nameplates sold in Japan. The scandal torpedoed sales and opened the door for Nissan Motor Co. to take a controlling 34% stake in its smaller Japanese rival.

Other improvements will come through leveraging Nissan’s local sales finance subsidiaries in global markets such as Australia, Canada and New Zealand, where Mitsubishi was not previously able to offer its own in-house financing. It also launched a leasing service in Thailand.

Operating profit margin climbed to 4.7% in the fiscal first quarter, putting Mitsubishi on path to the sustainable 6% operating profit margin it targets in two years.

Rising sales helped drive the recovery, despite losses from negative foreign exchange rates.

Revenue increased 3% to 440.90 billion yen ($3.92 billion) in the fiscal first quarter.

Global retail sales climbed 9% to 241,000 vehicles.

North Asia delivered a 43% surge in sales volume, thanks to brisk business in China, where sales rose to 24,000 units, from 15,000 a year earlier.

Mitsubsihi is represented in Iran by Arian Motors, an unofficial representative. Figures for the country were not available in the latest announcement. 

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