[Auto] Rebounding Mitsubishi swings back to profitability on hot new Outlander

[Mr.Talha]

 

TOKYO – Rebounding Mitsubishi Motors Corp. bounced back to profitability in the latest quarter and lifted its full-year guidance on a better sales outlook as business picks up in the U.S.

The redesigned Outlander crossover fueled a U.S. sales surge, while the global microchip shortage had the positive side effect of crimping production, helping Mitsubishi clear inventories.

As a result, Mitsubishi was able to pull in new, higher-income customers with the Outlander while boosting profitability, CFO Koji Ikeya said Tuesday while announcing financial results.

The Japanese automaker swung to an operating profit of 10.6 billion yen ($95.9 million) in the fiscal first quarter ended June 30, reversing an operating loss of 53.3 billion yen ($482.1 million).

Mitsubishi also reported net income of 6.1 billion yen ($55.2 million), compared with a net loss of 176.2 billion yen ($1.59 billion) the same quarter the year before.

Global sales shot up 65 percent to 230,000 vehicles in the quarter, driven by a doubling of volume in North America and Southeast Asia and a near doubling of sales in Australia and New Zealand.

Revenue increased 88 percent to 431.9 billion yen ($3.91 billion) in the three months.

Because of the lingering semiconductor shortage, Mitsubishi had expected to lose 80,000 vehicles in the current fiscal year that began March 31. Amid the chip crunch, global inventories fell to 290,000 units in June, from 490,000 units in March 2020, before the hit.

But the chip shortage is expected to ease starting the autumn, enabling Mitsubishi to make up about half the shortfall. So, for the full fiscal year, it now expects a total loss of only 40,000 units.

One benefit of lower inventories was that it enabled Mitsubishi to rein in incentives and advertising costs, boosting profitability as it rolled out the redesigned Outlander in April.

In the April-June quarter alone, U.S. sales of the Outlander more than doubled to 6,954 units, from 3,020 the year before. The restyled offering, with updated technologies, helped Mitsubishi attract a better base of customers with higher credit scores, said Yoichiro Yatabe, executive vice president for sales.

The arrival of the Outlander also drove U.S. sales of the brand’s three other nameplates, Mitsubishi said. Total retail volume rose 106.2 percent to 25,146 vehicles in the April-June period.