Mitsubishi 2011 Annual Report Download - page 35

Operational Review
During fiscal 2010, ended March 31, 2011, the business envi-
ronment surrounding the automobile industry was characterized
by such factors as the debt crisis in Greece, which led to ongo-
ing uncertainty about European sovereign debt. The effects of
economic stimulus measures introduced by various governments
waned, and international prices on crude oil and rare-earth
metals climbed. Furthermore, political tension mounted in North
Africa and the Middle East and the yen continued its rapid
appreciation before finally stabilizing, although remaining at a
high level of exchange against other currencies, creating a prob-
lematic scenario for Japanese automakers. Overall, however,
global automobile demand showed signs of recovery, supported
by high levels of ongoing growth in emerging markets, particu-
larly in China and other Asian countries.
In this business environment, the MMC Group continued to
introduce the initiatives outlined in Step Up 2010, its mid-term
business plan, in its final year of implementation, which involved
bolstering MMC’s strengths and securing steady profits.
However, many businesses in the automotive industry suffered
serious damage from the Great East Japan Earthquake, which
struck on March 11, 2011. This situation resulted in parts supply
issues, which in turn affected the MMC Group’s automobile
production.
Results of Operations
During the year, the sales volume (retail, under the previous
calculation method*) rose 145,000 vehicles, or 15% year on year,
to 1,105,000 units.
By geographic region, the sales volume in Japan amounted
to 164,000 vehicles, down 7,000 units, or 4%, owing to a drop
in demand stemming from the September 2010 discontinuation
of eco-car incentives and the effects of the Great East Japan
Earthquake. In North America, MMC’s retail sales volume was
down in Canada and Mexico, but in the United States the
combination of a recovery in demand plus the introduction of
the Outlander Sport contributed to a jump in sales. As a result,
the total for the region was 94,000 vehicles, up 6,000 units, or
7%. In Europe, the rollout of the ASX in June 2010, coupled
with robust sales of the Outlander in Russia, where MMC has
commenced local production, contributed to a retail sales volume
increase of 49,000 units, or 29%, to 218,000 vehicles. In Asia and
Other Regions, overall demand expansion continued in China,
as well as in the larger ASEAN markets of Thailand, Indonesia,
the Philippines and Malaysia. In Central and South America, an
increase in demand from Brazil pushed up sales in the region
substantially. As a result, MMC’s overall sales volume in the region
climbed 97,000 units, or 18%, to 629,000 units.
* The previous calculation method included retail units designed by MMC
and sold by other manufacturers under their brand name that provided
royalty income.
Net Sales and Income
Sales growth centered on emerging markets and the impact of
new model launches boosted the Group’s sales volume during
the year. As a result, net sales expanded ¥382.9 billion, or
26%, to ¥1,828.5 billion. Owing to a higher sales volume and
the effect of raw material and other cost reductions, operating
income grew ¥26.4 billion, to ¥40.3 billion, despite the impact
of yen appreciation. Income before income taxes and minority
interests grew ¥18.8 billion, to ¥30.4 billion, and net income
expanded ¥10.8 billion, to ¥15.6 billion.
Business Segment Information
• Automobiles
Sales in the automotive business sector came to ¥1,817.7
billion, an increase of ¥383.0 billion, or 27%. Operating income
rose ¥26.3 billion, to ¥37.8 billion.
20102009
Japan
FY2010 Regional Sales Volume (Retail) (Previous calculation method)
(Thousands of units)
(FY)
Registered
Vehicles
Minicars
171
106
65
164
104
60
(Thousands of units)
(FY)
20102009
North America
United
States
Canada &
Mexico
88
54
34
94
62
32
(Thousands of units)
(FY)
20102009
Asia and Other Regions
North Asia
ASEAN
Australia
& NZ
Central and
South America
Middle East
& Africa
532
109
187
69
62
105
629
94
85
68
167
215
(Thousands of units)
(FY)
20102009
Europe
Western
Europe
Central
Europe
Russia &
Ukraine
169
48
26
95
218
63
33
122
Financial Results and Discussion
MITSUBISHI MOTORS CORPORATION
Annual Report 2011 33