Japan's Mitsubishi Motors Corp on Tuesday forecast a near 14-fold rise in operating profit this year, as higher sales and cost savings from its alliance with Nissan Motor Co helps it draw a line under last year's mileage cheating scandal. Mitsubishi Motors CEO Osamu Masuko said he was committed to leading the firm through its recovery this year, having faced pressure from some shareholders to step down for the scandal.
"I will focus all of my energy on leading the company through the 2017 financial year," Masuko said at a results briefing, adding that he would make any decision about his future at the company "as appropriate". Japan's sixth-largest carmaker admitted last year to overstating the fuel economy on some of its models sold in Japan, a scandal that led Nissan to take a controlling stake in the company.
Since then, the automaker has reorganised its engineering division and has improved testing processes and compliance procedures to prevent a recurrence. Mitsubishi Motors expects an operating profit of 70 billion yen ($617.07 million) in the year to March, up significantly from 5.1 billion yen the previous year. But the outlook was below estimates for around 89 billion yen from 11 analysts polled by Thomson Reuters I/B/E/S. Mitsubishi Motors anticipates a net profit of 68.0 billion yen in the year to March. That's a turnaround from a net loss of 198.5 billion yen last year, when the automaker was hit by falling domestic sales and compensation costs.
It forecast global vehicle sales to hit 1.03 million vehicles this year, up 11 percent from last year. It hopes to boost sales to 1.25 million in the 2019 financial year. Much of this year's growth will be driven by a 23 percent jump in sales expected in Asia, the automaker's largest market, where it sells around one-third of its global production.
Mitsubishi Motors has been expanding its market share in the region, as it focuses on selling SUVs and pick-up trucks to households with rising incomes in Thailand, Indonesia, the Philippines and other countries. The automaker is assuming an average US dollar rate of 105 yen, anticipating the yen will strengthen from its trading level against the US currency of around 113 yen on Tuesday.