Japanese giant braces for sharp profit decline

Japanese auto giant Mitsubishi Motors is preparing for a sharp decline in profits for the current financial year, Interfax reports with reference to company's financial statements.

Mitsubishi Motors' profit is expected to be 35 billion yen ($225 million). This will mark a significant drop from the previously projected 144 billion yen. If this new forecast proves accurate, profits could fall by 77.4 percent compared to last year’s figures.

Mitsubishi also expects to sell 848,000 vehicles this financial year, down from its previous target of 895,000 units. Over the past three quarters, the company’s net profit has already fallen by 67.7 percent.

Earlier, reports surfaced about a possible merger of Japan’s three major automakers – Honda, Nissan, and Mitsubishi. If such a deal goes through, the newly formed company could achieve annual sales of up to 8 million vehicles, putting it on par with industry giants like Toyota, which sold 10.8 million cars last year, and Volkswagen, which sold 9 million.

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Mitsubishi Motors Corporation is a Japanese multinational automobile manufacturer headquartered in Minato, Tokyo, Japan. In 2011, Mitsubishi Motors was the sixth-largest Japanese automaker and the 19th-largest worldwide by production. Since October 2016, Mitsubishi has been one-third (34%) owned by Nissan, and included in the Renault–Nissan–Mitsubishi Alliance. Besides being part of the Renault–Nissan–Mitsubishi Alliance, it is also a part of Mitsubishi keiretsu, formerly the biggest industrial group in Japan. The company was originally formed in 1970 from the automotive division of Mitsubishi Heavy Industries. Mitsubishi Fuso Truck and Bus Corporation, which builds commercial-grade trucks, buses, and heavy construction equipment, was formerly a part of Mitsubishi Motors, but is now owned by German automotive corporation Daimler Truck, with Mitsubishi continuing to own a small stake.