Mitsubishi 1999 Annual Report Download - page 27

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Operational review
25
Truck and bus
The truck market in Japan remained extremely weak for
most of the year. Total sales of 225,335 units in fiscal 1998
were 25% down on 1997. Sales of heavy- and medium-duty
trucks (GVW of 8 tons and up) were 81,414 units, 27%
down, and the worst year in this category since statistics
were first compiled in 1966.
Mitsubishi truck sales were 70,396 units. This represent-
ed a drop of 22% over 1997, but the company maintained
leading market share of 31.2%. Sales of heavy- and medium-
duty trucks were 22,037 units, 26% down, giving the compa-
ny market share of 27.1%.
The truck business has traditionally been a major profit
engine for the company and the prolonged recession has se-
verely impacted earnings. However, there were indications
towards the end of fiscal 1998 that the market has now bot-
tomed out and expectations are that sales will improve sig-
nificantly in fiscal 1999.
Truck production has been reduced by 29.3% to 102,145
units. Adjustments to production schedules at the Tokyo
Plant have helped reduce inventories to appropriate levels:
total inventories by 7,200 to 19,400 units, and heavy- and
medium-duty truck inventories by 4,300 to 7,500 units.
Under RM2001, the company is cutting truck production
capacity to bring it in line with the smaller size of the market
today. At the beginning of 1999, the company sold the
Maruko transmission factory for ¥32.7 billion; the plant and
machinery to be transferred in stages to the company's main
truck facilities at Kawasaki and Nakatsu by 2001. As a re-
sult, annual capacity has been reduced by approximately 7%.
The company's FUSO truck sales network is being over-
hauled to realize greater efficiencies in what is traditionally a
solid and lucrative profit center.
New regulations governing light- and medium-duty truck
emissions will take effect in September this year. MMC
launched compliant light- and medium-duty trucks in April
and May this year. Employing advanced Common Rail fuel
injection, EGR, and improved combustion chamber design,
these trucks reduce NOx and particulate matter emissions by
between 25% and 50% over current regulatory levels, as well
as reducing fuel consumption and increasing power.
Total bus sales in Japan were 12,102 units, a 12% decline
over 1997. Mitsubishi brand bus sales were 4,589 units. This
marked a 7% decrease, but the company retained leading
share of 37.9%.
All large-size bus production was transferred to
Mitsubishi Automotive Bus Manufacturing Co., Ltd. (MBM)
in May 1998 to raise efficiencies. With no sign of recovery
in the bus market, however, the company is currently looking
at plans to reduce payroll and seek further increases in effi-
ciency.