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5
To Our Shareholders and Stakeholders
The main points of MMC’s performance in fiscal
year 2006 were as follows:
1. Net Profitability Restored
In fiscal year 2006, MMC reported worldwide sales
volume of 1,230,000 vehicles, down 8.5% year on
year. Despite this, net sales increased 3.9% to
¥2,202.9 billion, mainly underpinned by a better
model mix and the favorable impact of a weaker
yen. Helped partly by the benefits of improved prof-
itability in North American sales financing opera-
tions and a concerted cost-cutting drive by all
corporate officers and employees, MMC reported
profitability at all levels. Operating income rose
¥33.4 billion year on year to ¥40.2 billion and net
income improved ¥100.9 billion to ¥8.7 billion.
This was the first time in four fiscal years that MMC
has recorded a net profit.
2. High Capacity Utilization at Domestic Produc-
tion Facilities
In December 2006, MMC transferred some produc-
tion of the
Outlander
model from the Mizushima
Plant to the Okazaki Plant in response to strong sales
of this model. With this move, the Okazaki Plant
resumed two-shift production for the first time in 32
months. In addition, two-shift production at consoli-
dated subsidiary Pajero Manufacturing Co., Ltd. com-
menced in October 2006 following the launch of the
new
Pajero
and
Delica D:5
models. All MMC domes-
tic production facilities now have high capacity uti-
lization, including the Mizushima Plant, where
capacity utilization rates have remained high. This
trend is expected to continue in fiscal year 2007.
3. Continued Creation of Attractive Automobiles
Under the Mitsubishi Motors Revitalization Plan, MMC
has actively brought to market many global strategic
vehicles, including the
Outlander
,
Triton (L200)
,
Pajero
and
Lancer
models.
Moreover, in the Japanese market, the
i
minicar
has received some 20 prestigious awards. Notably,
the
i
, which went on sale in January 2006, was
named the RJC Car of the Year 2007. This model
was also ranked as the most appealing mini-car
model in Japan in the 2006 Japan Mini-Car Auto-
motive Performance, Execution and Layout (APEAL)
Study and took first place in a tie in the 2006 Japan
Mini-Car Initial Quality Study (IQS); both on re-
search by J.D. Power Asia Pacific, Inc. The
i
has
thus garnered a strong market response.
Following the launch of the 4WD
Delica D:5
in
January 2007 in Japan, MMC rolled out a 2WD ver-
sion of this model in May. And August 2007 saw the
launch of the
Galant Fortis
(
Lancer
in overseas mar-
kets), our first new sedan in seven years in Japan.
Starting with the all-new
Lancer Evolution
high-
performance 4WD sedan, MMC will continue to cre-
ate attractive automobiles that have the signature
features of Mitsubishi-brand vehicles, as it works
to enhance the image of the Mitsubishi Motors
brand in markets around the world.
In fiscal year 2007, the final year of the
Mitsubishi Motors Revitalization Plan, MMC will
work to achieve the plan’s goal of building solid
profitability. To this end, while carefully monitor-
ing changes in a challenging operating climate, we
will work to ensure that we steadily enhance our
operations. We are projecting worldwide sales
volume of 1,323,000 vehicles in fiscal year 2007,
an approximate 7% increase from fiscal year 2006,
based on the roll-out of global strategic models in
markets worldwide. We are working to continue ex-
panding earnings by increasing retail sales and also
by actively increasing OEM supply volumes. Fur-
thermore, in the Japanese market, where overall
demand remains weak, we are rebuilding our sales
networks through such measures as consolidating
sales companies over large areas and will imple-
ment profitability-focused sales strategies.
We will formulate our mid-term management plan
during fiscal year 2007. The next plan is positioned
as a stage for establishing a foundation for sustain-
able growth in the future. We have already begun
considering goals for each business and various ini-
tiatives to achieve them. All corporate officers and
employees will roll up their sleeves to put the
finishing touches on the Mitsubishi Motors Revi-
talization Plan, so that we can move on to the next
stage of growth with renewed confidence when an-
nouncing the next plan.
September 2007
Takashi Nishioka
Chairman of the Board
Osamu Masuko
President