TOKYO (Reuters) – Japan’s Mitsubishi Motors (7211.T) faced doubts about an immediate recovery after recording poor quarterly sales in its main Southeast Asian market due to the coronavirus outbreak, causing its shares to fall by thirteen percent to an all-time high on Tuesday. .
A day earlier, Mitsubishi Motors, a junior member of the automotive alliance of Nissan Motor (7201.T) and Renault SA (RENA.PA), reported that sales in Southeast Asian countries, which accounted for a quarter of its global sales, plummeted. 68% more than expected would account for only 17% of total sales from April to June.
The automaker has opted for expansion in Indonesia, the Philippines, Thailand and Vietnam, where it has ruled its biggest rivals, and which have suffered the brunt of the coronavirus pandemic later than China and other countries.
As a result, the recovery in sales of some Mitsubishi experts could lag behind other automakers and complicate a detailed restructuring plan on Monday.
The automaker projected an operational loss of 140 billion yen ($1.33 billion) for the year ending March 31, 2021, its biggest loss in at least 18 years.
The effects of Mitsubishi Motors were “shocking,” said LightStream Research analyst Mio Kato, who publishes on the Smartkarma platform, noting that Southeast Asia is of particular concern.
“ASEAN is its expansion engine and even ranked as its main asset for the Renault-Nissan Alliance. ASEAN sales collapsed and are now generating losses,” Kato said in a note to customers, referring to Southeast Asia.
Globally, it sold only 139,000 cars in the april quarter to June, 53% less than a year ago. To keep the cash, the automaker said it would pay a dividend this year.
Mitsubishi shares closed with a drop of 12.6% to 235 yen after falling as low as 234 yen, the lowest in the board in 1988. Stocks have halved this year.
Hisashi Arakawa, deputy director of investment control at Aberdeen Standard Investments in Tokyo, said Mitsubishi Motors’ difficulties also contrasted with those of some other Japanese automakers, namely Toyota Motor Corp (7203.T), who were doing well in the pandemic thanks to expansion. market share in several markets.
“In addition to significant losses, the dividend cut would likely have contributed to the decline in their stocks,” he added.
Some analysts tested positive for the long term of the company and supported its recovery strategy.
“In the short term, Southeast Asia may not be as good for them, but in the long run, it’s the right thing to do for them,” said Chris Richter, Japan’s deputy director of studies at CLSA.
Reporting through Naomi Tajitsu, Hideyuki Sano, David Dolan; Written through Chang-Ran Kim; Editing through Muralikumar Anantharaman
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