|  |  | 

India Top Headlines

Mitsubishi Pajero SUV: Mitsubishi sees biggest operating loss in 18 years, to discontinue Pajero SUV


TOKYO: Japan’s Mitsubishi Motors Corp on Monday forecast its second consecutive year of losses hit by a drop in sales due in part to the coronavirus pandemic.
Japan’s No. 6 automaker anticipates an operating loss of 140 billion yen ($ 1.33 billion) for the year ending March 2021, just as it embarks on a plan to reduce its workforce and production, and close unprofitable dealerships to reduce 20% of fixed costs in two years.
This would be Mitsubishi’s biggest loss in at least 18 years according to the company’s financial records dating back to 2002.
“To pave the way to recovery, the top priority for all executives is to share a sense of crisis with employees to execute cost reductions,” Chief Executive Takeo Kato told reporters.
The coronavirus crisis has exacerbated struggles at the company that had already been struggling against falling sales in China and Southeast Asia, its largest market accounting for a quarter of its sales.
As part of its restructuring plan, Mitsubishi, a junior member of the Nissan-Renault car manufacturing group, said it would stop manufacturing the crossover Pajero SUV model next year and close the plant in Japan that makes the vehicle.
SUV maker Outlander said it would reduce its presence in Europe and North America and focus on growing in Asia.
The restructuring plan is designed to raise the company’s operating profit to 50 billion yen in 2022/23 and increase the operating margin to 2.3% from -9.5% now.
Mitsubishi reported an operating loss of 53.3 billion yen in the first quarter ending June 30, its second operating loss in three quarters after vehicle sales halved to 127,000 units from the previous year.
The company recorded extraordinary losses of 116 billion yen in the period and expects such losses to total 220 billion yen this year.
To preserve cash, the automaker said it would not pay dividends this year.

Reference page