TOKYO (Reuters) – Japan’s Mitsubishi Motors Corp (7211.T) predicted Monday’s moment directly from annual losses affected by a drop in sales due to the coronavirus pandemic.
Japanese manufacturer No. 6 forecasts an operational loss of 140 billion yen ($1.33 billion) for the year ending March 2021, while embarking on a plan to decrease its production and close unprofitable dealers to reduce 20% of the constant prices in two years.
This would be Mitsubishi’s biggest loss in at least 18 years according to the company’s monetary records in 2002.
“To pave the way for recovery, the most sensible precedence for all leaders is to establish a sense of crisis with workers to collect reductions,” executive chairman Takeo Kato told the press.
The coronavirus crisis has exacerbated the company’s difficulties, as it is already suffering from declining sales in China and Southeast Asia, its market, which accounts for a quarter of its sales.
As a component of its restructuring plan, Mitsubishi, a minor member of the Nissan-Renault car production group, said it would avoid the production of the Pajero SUV cross-style next year and close the plant in Japan that manufactures the vehicle.
The manufacturer of the SUV Outlander said it would decrease its presence in Europe and North America and expand in Asia.
The restructuring plan aims to increase the company’s operating profit to 50 billion yen by 2022/23 and increase the operating margin to 2.3% from -9.5% today.
Mitsubishi reported an operational loss of 53.3 billion yen in the first quarter ending June 30, its operating loss in 3 quarters after vehicle sales halved to 127,000 games last year.
The company recorded ordinary losses of 116 billion yen in the era and expects those losses to reach 220 billion yen overall this year.
To keep the money flow, the automaker said it would pay a dividend this year.
Reporting through Louise Heavens
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