Mitsubishi 2007 Annual Report Download - page 47

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In the U.S., Mitsubishi Motors Credit of America, Inc. (MMCA) conducts auto leasing, sales financing, and
related operations.
In fiscal year 2006, revenues from financial services increased 22.4% year on year to ¥47.9 billion. MMC
reported operating income of ¥22.3 billion from the segment, an improvement of ¥11.9 billion from the
previous fiscal year. This improvement was mainly due to structural enhancements in U.S. financial services
operations, resulting in a reduction of reserve burden for sales finance receivables.
<Geographical Segment Information>
The geographical segment analysis provided in this section is based on the results aggregated by the region of
the wholesaler and end user. Accordingly, figures differ from the ‘Geographic Segment Information’ section
provided in the Notes to Consolidated Financial Statements. Figures in this section correspond to the sales
figures reported in the ‘Overseas Sales’ section in the Notes to Consolidated Financial Statements.
■ Japan
In Japan, retail sales declined 10,000 units, or 3.9% year on year, to 247,000 units in fiscal year 2006.
Sales in Japan had increased for the 19 consecutive months between May 2005 and November 2006.
Supporting this performance were strong starts for the new
Pajero and Delica D:5 , which were launched in
October 2006 and January 2007, respectively. However, market conditions remained challenging. Total
domestic demand was down 4.3% year on year, particularly for registered vehicles, for which demand dropped
8.3% year on year. Against this backdrop, although sales of Mitsubishi minicars in Japan were mostly the
same as the previous fiscal year, this was insufficient to make up for the decline in sales of registered
vehicles. Consequently, in Japan, sales increased 0.4% to ¥506.0 billion. The operating loss was ¥43.8
billion, an improvement of ¥11.5 billion from the previous fiscal year, reflecting policies aimed at curtailing
low-margin transactions and the release of the new
Pajero and Delica D:5 , both of which are high-margin
models, amid a decline in retail sales.
■ North America
In the U.S., the world’s largest automobile market, the Company aggressively introduced new models, includ-
ing the new
Eclipse Spyder in April 2006, the new Outlander , in November 2006, and the new Lancer , which
was rolled out in the U.S. before anywhere else in the world in March 2007. At the same time, MMC was
successful in strengthening the marketing capabilities of local dealership networks, boosting productivity at a
local plant and implementing effective sales promotion and advertising campaigns. As a result, retail sales in
North America rose 8,000 units, or 5.1%, to 164,000 units, for the first time in the five fiscal years since
fiscal year 2001.
Due to the above factors, sales in North America increased 1.9% to ¥423.6 billion. Operating income improved
¥7.8 billion to a profit of ¥0.6 billion, due in part to improved profitability in financial services operations.
■ Europe
In Europe, retail sales rose 15,000 units, 5.6% over fiscal year 2005 to 282,000 units. Despite falling sales
in major countries such as Germany and the U.K., sales were strong in growth markets, up roughly 20% in
Russia and doubling in the Ukraine.
As a result, net sales increased 13.1% to ¥662.8 billion and operating income improved ¥18.2 billion to
¥42.6 billion.
■ Asia and Other Regions
In Asia and other regions, retail sales decreased 127,000 units, a 19.2% drop from fiscal year 2005, to
537,000 units. Although sales volumes increased in Africa, the Middle East and Latin America, where de-
mand is strong, sales volumes were down sharply in Indonesia, Malaysia, Taiwan and China, where sales of
parts for overseas production account for much of MMC’s sales volume.
Net sales decreased 0.6% to ¥610.5 billion, while operating income fell ¥4.1 billion to ¥40.8 billion.
Financial Results and Discussion