Mitsubishi Motors’ fuel economy scandal will continue to wreck financial havoc on the automaker next year. In a newly published forecast, the company predicts it will post a net loss of 145 billion yen ($1.4 billion) in income for the fiscal year that will run from April 2016 to March 2017. Global vehicle sales will drop to an estimated 962,000 units, down 8 percent. Volume will suffer the worst in Japan where deliveries will fall an anticipated 41 percent to 60,000 units.
Mitsubishi’s scandal began in April when the automaker admitted to falsifying the fuel economy for some micro cars on the Japanese market, and a few days later the company said it had been using improper testing methods since 1991. In some cases, engineers calculated the figures on paper from inaccurate data rather than doing real-world evaluations.
In the last fiscal year, Mitsubishi posted a net income profit of 72.6 billion yen ($695 million). However, the company estimated that the fuel economy scandal cost it 205 billion yen ($2 billion) in the same period. That figure includes $479 million in payments to affected owners, the loss of sales, and covering the expenses for furloughed workers at its minicar plant.
In the wake of the scandal, Nissan bought a 34 percent stake in Mitsubishi Motors. The buyout keeps the embattled automaker is business for now. However, the new forecast indicates a rough road ahead for the company.
Source: Mitsubishi Motors via The Asahi Shimbun
|Mitsubishi Motors Corporation Announces Full-year Fiscal 2016 Forecasts|
Tokyo, June 22, 2016 - Mitsubishi Motors Corporation (MMC) today announced its forecasts for the FY2016 full-year (April 1, 2016 to March 31, 2017). The announcement on the FY2016 forecasts were put "on hold" in order to carefully assess the future impact from the "improper conduct in fuel consumption testing on vehicles manufactured by MMC," which was announced on April 20, 2016.
On June 17, MMC submitted a report on the investigation results as well as preventative measures to Ministry of Land, Infrastructure, Transport and Tourism concerning the improper conduct in fuel economy testing. Now that the full scope of the issue has been clarified, MMC was able to calculate forecasts and made the announcement today.
[ Consolidated Summary (PDF: 1pages 14KB) ]
[ Presentation (PDF: 14pages 453KB) ]
[ Additional Information Material (PDF: 2pages 252KB) ]
1. FY2016 forecasts
FY2016 operating results forecasts are as follows:
1. Outline of FY2016 operating forecasts
*Net income attributable to owners of the Parent
2. Sales volume forecast (Retail)
Forecast for FY2016 is 962,000 units, a decrease of 8% or 86,000 units over the same period in FY2015. Sales volumes by region are as follows: