Mitsubishi Motors Corp ((JP:7211)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Mitsubishi Motors Corp presented a balanced sentiment, highlighting both achievements and challenges faced by the company. Mitsubishi showcased strong performance in North America and its domestic market, accomplishments such as winning the Design Car of the Year award, and the initiation of overseas EV production. However, these positives were tempered by global sales volume declines, challenges in the ASEAN region, and increased costs impacting profitability.
Increase in Net Sales and Operating Profit
The company reported a 14% year-on-year increase in net sales, reaching JPY 263.9 billion. Operating profit saw a modest 4% rise to JPY 160.1 billion, with an operating profit margin of 7.8%. This indicates a solid financial footing despite the market challenges.
North America and Domestic Market Growth
Mitsubishi experienced robust retail sales growth in North America, driven by increased fleet demand and strong momentum for the OUTLANDER series. In Japan, the resolution of vehicle supply shortages led to a significant year-over-year sales increase, highlighting Mitsubishi’s adaptability to market conditions.
Design Car of the Year Award
In a notable achievement, the Delica Mini won the prestigious Design Car of the Year award at the Japan Car of the Year 2023-2024. This marks a significant milestone, as it is the first time Mitsubishi has received this accolade, enhancing its brand prestige.
First Overseas EV Production
Mitsubishi has commenced production of the L100EV, a light commercial electric vehicle, in Indonesia. This strategic move is aimed at meeting the growing demand for EVs in the ASEAN region, positioning the company as a leader in sustainable automotive solutions.
Decrease in Global Sales Volume
The global sales volume saw a 7% year-on-year decline, with 585,000 units sold. This drop was attributed to transportation capacity issues and sluggish demand in specific regions, signaling a need for strategic adjustments.
Challenges in ASEAN Region
The ASEAN region faced a tough market environment, with an 8% year-on-year decrease in retail sales volume due to inflation, high interest rates, and intensified competition. Mitsubishi is navigating these hurdles as it seeks to stabilize its market position.
Profit Deterioration Due to Costs
Profitability was adversely impacted by increased sales expenses and procurement costs, which negatively affected operating profit by JPY 22.1 billion and JPY 29 billion, respectively. This underscores the ongoing cost pressures the company is managing.
Thailand Market Struggles
The Thailand market experienced a sharp 40% year-on-year decline in total industry volume (TIV), especially in the pickup segment. This was largely due to stricter automobile loan screenings, creating significant challenges for Mitsubishi in this key market.
Forward-Looking Guidance
Looking ahead, Mitsubishi Motors plans to maintain its profit forecast amidst a challenging business environment. The company aims to focus on new product launches and a midterm plan to introduce 12 new models, including seven electrified vehicles, by 2025. Despite logistical challenges and sluggish demand in some regions, Mitsubishi’s strategic initiatives reflect its commitment to growth and innovation.
In conclusion, the earnings call for Mitsubishi Motors highlighted a balanced sentiment, with strong performances in key markets and significant achievements offset by global sales challenges and increased costs. As the company navigates these dynamics, its forward-looking strategy emphasizes innovation and market expansion, positioning Mitsubishi for future success.
