Mitsubishi Motors is confronted with a difficult financial year, whereby the company lowers its net profit forecast by a stunning 76%. The automaker now expects to earn only 35 billion yen (around $ 226 million) by the end of the tax year in March, a sharp decrease in his earlier prediction of 144 billion yen.
The dramatic revision stems from a combination of factors, including weak wholesaler sales, rising supplier costs due to inflation and higher marketing costs in North America, Nikkei Asia reported. The company also reduced its global sales objective for the year, now in the expectation to sell 848,000 vehicles, against the previously projected 895,000. Although this is still an improvement compared to the 815,000 units that were sold last year, it indicates the continuous battle, especially in important markets such as Thailand and Indonesia.
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A weakening grip in Southeast -Asia
Southeast -Asia has long been a crucial region for Mitsubishi, but the automaker loses ground there. CEO Takao Kato pointed to a steep decline of Thailand’s demand, which once stood a million units annually but has to recover after the pandemic. Household debts and unfavorable exchange rates deteriorate the situation, forcing Mitsubishi to restructure its activities in the region, including offering early retirement to 300 employees.
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Throwing a key in the merger of Nissan-Honda
Reports have indicated that Mitsubishi might be a potential merger between Nissan and Honda, despite his historical ties with Nissan. Although CEO Kato has triggered speculation that Mitsubishi would be completely excluded, he indicated that the company uses a wait -and -see approach before he gives a decision about any involvement.
The strengths of Mitsubishi are in plug-in hybrid technology, pick-up trucks and are presence in the Asia-Pacific-Market-Eras that can supplement a larger alliance. However, the lack of scale and investments in the North -American market growth and the development of car -intelligence makes it increasingly vulnerable in an industry focused on electrification and technology.
Of course Mitsubishi can only decide to participate in a merger if it actually happens. Two people who are familiar with the merger talks said that Nissan rejected Honda conditions who would have made a subsidiary of Honda from Nissan instead of the same. While the conversations continue, the possibility that the merger will go through completely.
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A glimmer of hope in North America
Despite his struggles worldwide, Mitsubishi had a relatively strong 2024 in North America, with a sale of 26% -the best result of the brand since 2019. The company is planning to build on at the momentum with an extensive line -up Next year. During a meeting with dealers in January, Mitsubishi shared plans to offer a small crossover-Coupe-style electric vehicle next year, Automotive News reported.
Last thoughts
That said, Mitsubishi is confronted with a tough fight. Although the company remains small in comparison with its Japanese rivals, the limited line -up and dealers’ network leave it exposed both more agile and more. Because global car manufacturers form alliances to share development costs, Mitsubishi must ultimately have to decide whether they remain independent or find a partner.
For now, the company must navigate through a shrinking Southeast -Asian market, rising costs and an uncertain role in a rapidly consolidating car industry.
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