Mitsubishi posts $1.7bn net loss for FY 2016

TOKYO: Mitsubishi Motors Corp yesterday reported a group net loss of 198.52 billion yen ($1.75 billion) for the business year through March 2017 amid expanding costs related to a fuel economy data manipulation scandal.

The Japanese automaker, which became part of Nissan Motor Co last year, reported a consolidated operating profit of 5.12 billion yen, down 96.3% from a year earlier, on sales of 1.91 trillion yen, down 15.9%.

The company, however, said it expected to return to profitability in the current business year ending March 2018 with a group net profit of 68.0 billion yen, as strong relations with Nissan are likely to help boost its corporate performance.

“Although our 12-month results were marred by the fuel economy scandal in Japan during the first half, we have begun a V-shaped recovery,” Mitsubishi Motors president and CEO Osamu Masuko said in a statement.

“Following the strategic investment by Nissan last autumn, we are now seeing the initial benefits of our partnership and the first synergies from our membership of the wider Renault-Nissan alliance,” he added.

In fiscal 2016, Mitsubishi Motors’ auto retail sales in North America grew 2% from the previous year to 138,000 units, but they fell 22% to 80,000 units in Japan, 13% to 179,000 in Europe and 2% to 315,000 in Asia excluding Japan.

It forecast global vehicle sales to hit 1.03 million vehicles this financial year, up 11% from last year.

It was revealed last spring that Mitsubishi Motors had manipulated data to make some minicar models look more fuel efficient, including models supplied to Nissan. It was later found that improper practices related to fuel economy data were prevalent at the automaker, affecting additional models.

Mitsubishi Motors is now counting on synergy effects following Nissan’s acquisition of 34% stake, a deal aimed at deepening cooperation on autonomous driving and other advanced technologies.

“As part of the deal, the scandal-hit automaker will supply auto parts to be produced at its factory in western Japan to the country’s second-largest carmaker by volume,’’ a source close to the matter said yesterday.

The two companies have agreed to make efforts to cut costs by jointly operating factories and procuring auto parts.