AUTONEWS

Mitsubishi cuts net profit forecast by 76%

Mitsubishi has been in the news a lot lately, mainly due to its possible involvement in the Nissan-Honda merger — which ultimately didn’t happen. However, that hasn’t helped the company’s outlook, with the Japanese automaker issuing a very low net profit forecast for the fiscal year ending in March.

In its third-quarter financial results presentation, Mitsubishi adjusted its annual net profit forecast to 35 billion yen, or about $3.3 billion at current exchange rates. That’s a 76% drop from its previous forecast of 144 billion yen, issued in May 2024.

The adjustment is due to weak sales in the wholesale sector, marketing expenses in North America and rising supplier costs due to inflation, according to Nikkei Asia.

Mitsubishi also revised its sales targets for 2025, lowering the projection from 895,000 to 848,000 units. That figure is still up from 815,000 units sold a year earlier. Most of that decline is coming from the brand’s main sales region, Southeast Asia. Specifically, the company is struggling in Thailand and Indonesia, where it previously thrived. “In the past, there was a demand of one million vehicles per year in Thailand,” CEO Takao Kato said in an earnings call on Monday, according to Nikkei Asia. “That demand has not recovered significantly after the COVID-19 pandemic, and will decline even more rapidly in fiscal 2023 and 2024 due to high household debt levels.” 

Kato added that Thailand’s unfavorable exchange rates and continued rise in household debt will continue to weigh on earnings. The situation reached a point where Mitsubishi had to restructure its offices in the region, including the early retirement of 300 employees.

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