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2
Takashi Sonobe President & CEO
In fiscal 2001, ended March 31, 2002, we completed
our break with the past. We implemented the first stage
of the Turnaround, achieved all our interim objectives
and delivered net income for the first time since fiscal
1998. Acting with urgency, we have managed to stabi-
lize the core of the business model. Our cost-reduction
and efficiency initiatives are well underway, and we have
already exceeded many of the cost-reduction targets.
Most important, the company is repositioning for growth
across products and markets at full steam. Having made
a commitment toward change and renewal, I can state
honestly that we have taken great strides down that path.
Results for year ended March 2002
Mitsubishi Motors Corporation (MMC)
is profitable again in spite of severe
challenges. Consumer spending
remained sluggish amid rising
unemployment. The Japanese car
market shrank 3% in value. Our do-
mestic sales volume dropped
10%, and we saw our
TO OUR SHAREHOLDERS
Rolf Eckrodt President & CEO
market share in Japan slip by 0.6 of a point. This was
offset by a strong performance in the U.S., where we
notched up higher sales for the third year running—
aggregate volume growth over 1998-2001 totaled nearly
70%. The depreciation of the yen against the dollar gave
a further boost to this success story.
Our consolidated net sales declined 2.3% to ¥3,200.7
billion ($24,020 million). But the success of our various
Turnaround initiatives made a huge difference to our op-
erating profitability. Following the operating loss of ¥73.9
billion ($555 million) last year, in fiscal 2001 we posted
operating income of ¥40.2 billion ($302 million). Both pas-
senger car and commercial vehicle operations were prof-
itable at the operating level in all overseas markets—with
the exception of Europe, where our restructuring efforts
are now progressing at high speed. We posted net income
of ¥11.3 billion ($84 million), compared with a net loss in
fiscal 2000 of ¥278.1 billion ($2,087 million).
Turnaround on track
We thus delivered on our central commitment to break
even or better at the consolidated level in fiscal 2001.
This return to profitability resulted from considerable
progress on each aspect of the Turnaround.
In the short term, the Turnaround entails reduction of
material and other costs, together with streamlining of
production capacity. The targets for fiscal 2001 were re-
ductions of ¥60 billion ($450 million) in material costs and
¥40 billion ($300 million) in fixed costs. Against such tar-
gets, we achieved total savings of ¥137 billion ($1,028
million), 37% above the initial target.
We are making more progress than initially expected
in adjusting our production capacity in Japan (original
target; reduction of 20% by the end of fiscal 2003). Our
closure of the Oye Plant effected an 18% reduction. The
closure of one of four production lines at the Mizushima
Plant achieved a total reduction of 28% by July 2002.
On headcount adjustment that comes as a result of
efficiency improvements in various areas, MMC is also
well ahead of target. In fiscal 2001, early-retirement
2