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Mitsubishi Motors sees profit surge on higher Asia sales, cost savings
[TOKYO] Japan's Mitsubishi Motors Corp on Tuesday forecast a near 14-fold rise in operating profit this year, as higher sales and cost savings from its alliance with Nissan Motor Co helps it draw a line under last year's mileage cheating scandal.
The brighter outlook reflects the automaker's recovery from last year's scandal in which it overstated the fuel economy on some of its Japanese models, and led to Nissan taking a controlling stake in the company.
Japan's sixth-largest carmaker anticipates an operating profit of 70 billion yen (S$869.1 million) in the year to March, up significantly from 5.1 billion yen the previous year.
But the outlook was below estimates for around 89 billion yen from 11 analysts polled by Thomson Reuters.
Mitsubishi Motors anticipates a net profit of 68.0 billion yen in the year to March. That's a turnaround from a net loss of 198.5 billion yen last year, when the automaker was hit by falling domestic sales and compensation costs.
The automaker has reorganised the engineering division involved in the mileage manipulation scandal and has improved testing processes and compliance procedures to prevent another incident.
It forecasts global vehicle sales will hit 1.03 million vehicles this year, up 11 percent from last year.
Much of the growth will be driven by a 23 per cent jump in sales expected in Asia, the automaker's largest market, where it sells around one-third of its global production.
Mitsubishi Motors has been expanding its market share in the region, as it focuses on selling SUVs and pick-up trucks to households with rising incomes.
The automaker is assuming an average US dollar rate of 105 yen, anticipating the yen will strengthen from its trading level against the US currency of around 113 yen on Tuesday.