Mitsubishi Motors Corp. finally managed to post an operating profit in Europe after three years of financial bleeding, thanks to favorable exchange rates, strong demand for its Outlander plug-in hybrid and the shutdown of its site in the Netherlands. Following a JPY7 billion operating loss in fiscal 2012, Mitsubishi Motors Europe posted JPY37 billion (EUR261 million) in the fiscal year ended March 31, 2014.
Helping boost Mitsubishi’s earnings is the yen, which weakness hikes the yen value of earnings from abroad and renders Japanese exports more competitive globally. In fact, the depreciation of the Japanese currency contributed JPY65.9 billion to Mitsubishi’s overall profit in its 2013-2014 fiscal year.
Sans such factor, Mitsubishi’s operating profit would have dropped 15 percent to JPY58 billion. The carmaker posted a 15-percent surge in global net sales to JPY2.1 billion; an 83-percent jump in operating profit to JPY123 billion; and an operating margin of 5.9 percent.
Mitsubishi Europe -- including 34 European markets as well as Russia, Ukraine and Kazakhstan – accounted for around a quarter of the carmaker’s revenues in the previous fiscal year at JPY484 billion (EUR3.4 billion ). Surging the strongest were sales in Western Europe, up 19 percent to 111,000 vehicles.
On the other hand, sales in Russia, Ukraine and Kazakhstan jumped 3 percent to 91,000 units. Mitsubishi logged strong sales of the Outlander, surging 76 percent to 25,917 units in the previous fiscal year, according to JATO Dynamics. Around 32 percent of Outlander sales were attributed to its plug-in hybrid version, JATO figures indicate.
During the fiscal year, Mitsubishi sold its Born facility in Netherlands to VDL. The transaction -- made in December 2012—had an "obviously some impact" on the Mitsubishi Europe’s financial results, spokesman Daniel Nacass told Automotive News Europe.
For the fiscal year ending March 2015, Mitsubishi is expecting its global sales to surge 13 percent to 1,182,000 vehicles and western European sales to rise 28 percent to 142,000 units.
The carmaker, however, expects its sales in Russia, Ukraine and Kazakhstan to drop by 9 percent to 83,000 units. Mitsubishi still sees its European unit to hike its operating profit by 29 percent to JPY48 billion in the year ended March 2015. [source: Mitsubishi]