Mitsubishi may break even in North America for full fiscal year

Article by Anita Panait, on August 7, 2013

Mitsubishi Motors Corp.’s operations in North America may break even for the fiscal year ending March 31, 2014, as boosted by a depreciating Japanese yen as well as ramped-up production of the Outlander Sport compact crossover at its Normal site in Illinois, according to Yoshihiro Kuroi, senior executive officer in charge of corporate planning.

The last time Mitsubishi posted a profit in North America was for the fiscal year ended March 31, 2007, when it recorded ¥600 million ($6.37 million) in profits.

Kuroi said that in the fiscal first quarter ended June 30, 2013, the carmaker’s posted a huge drop in operating losses to ¥2.3 billion ($24.43 million), from operating losses of ¥7.4 billion ($78.59 million) in the same period in 2012, despite stagnant sales of about 23,000 vehicles.

The production of the Outlander Sport in Illinois, which started in July 2012, helped fill in capacity at a site that was phasing out older models like the Endeavor crossover, Galant sedan and Eclipse sporty car.

The move also allowed Mitsubishi to offset exchange rate losses on importing the vehicle. The depreciating yen also hiked profit margins on Japan-built models like the standard Outlander crossover and Lancer sedan.

Kuroi said they expect the “trend of improving earnings” to continue, as the carmaker want to make the “most of this opportunity” to post a breakeven as quickly as possible this year.

Mitsubishi sold about 23,000 vehicles in North America in its first fiscal quarter period, with a goal to sell around 100,000 units for the full fiscal year. The carmaker sold 249,000 vehicles around the world, for a 4-percent jump.

Mitsubishi's posted an overall net income of $174.60 million in the fiscal first quarter, reflecting an 18-percent drop. Global revenues at the carmaker were $4.35 billion in the quarter.

Headquartered in Minato, Tokyo, Japan, Mitsubishi Motors Corporation is one of the largest carmakers in the world. Its automotive roots are traceable back to 1917, when the Mitsubishi Shipbuilding Co., Ltd. introduced the Mitsubishi Model A, which is regarded as the first series-production vehicle in Japan.

In 1950, Mitsubishi Heavy Industries was split into three regional companies, each developing its own motor vehicles. These three companies re-integrated as Mitsubishi Heavy Industries in 1964. To focus on the auto industry, Mitsubishi Motors Corp. (MMC) was established on April 22, 1970 as a wholly owned subsidiary of Mitsubishi Heavy Industries. It was led by Tomio Kubo.

Mitsubishi Motors operates in the US and Canada through Mitsubishi Motors North America, Inc., which oversees sales, manufacturing and research and development functions in the region. Headquartered in Cypress, California, Mitsubishi Motors North America was founded in 1981.

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