Mitsubishi Targets Business Year 2005/06 for Profitability
Those waiting to see how Mitsubishi Motors Corporation (MMC) fares financially before purchasing one of the brand's cars or SUVs can breathe a sigh of relief, it's now safe to lay down the cash and take home the new Galant.
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| Mitsubishi Motors Corp. execs can breathe a sigh of relief, as they have secured USD$4 billion (CAD$5.5 billion) in investment. (Photo: Trevor Hofmann, Canadian Auto Press) |
MMC looked in a precarious position after DaimlerChrysler (DCX) opted out of participating in its restructuring plan, leaving Japan's number four automaker facing the toughest challenge in its 87 years of building cars, trucks and SUVs.
MMC's new management looks to be victorious nevertheless, stating on Friday that it had secured USD$4 billion (CAD$5.5 billion) in investment to balance the books and bring stability to its ongoing global operations.
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| MMC announced that it would return to profitability by next April, but not without serious cuts in labor and production facilities. (Photo: Alexandra Straub, Canadian Auto Press) |
After securing the capital MMC committed that it would return to profitability by next April, the beginning of its business year, but not without serious cuts in labor and production facilities. The automaker is targeting a profit of 10 billion yen ($88.8 million) for fiscal 2005/06. Fiscal year 2006/07 should see an operating profit of 120 billion yen, according to the automaker, with recurring profit of 100 billion yen, net profit of 70 billion yen on sales of 2.49 trillion yen.
This is a bullish forecast considering its 2003/04 fiscal year ended with a net loss of 215 billion yen (USD$1.9 billion), almost three times the 72 billion yen losses as predicted in its February forecast. MMC blames what were poorly managed U.S. operations for the substantial losses. MMNA executives have since been let go and new U.S. management put in place for the brand's recovery in North America.