Mitsubishi 2008 Annual Report Download - page 24

22 mitsubishi motors corporation annual report 2008
Overview of Fiscal Year 2007 and Outlook for Fiscal Year 2008
Retail sales in the Japanese market totaled 219,000 units in fiscal
year 2007, decreasing 11.3% year on year.
In Japan’s challenging domestic climate, total automobile demand
for the market as a whole showed no signs of a rebound, falling 4.8%
year on year. Despite these circumstances, in addition to strong sales
of the
Delica D:5 model (launched in January 2007), the new Galant
Fortis
sedan (introduced in August 2007) achieved sales three times
higher than its monthly target only three weeks after launch. Addi-
tionally,
the Lancer Evolution X was awarded a special prize (Most
Fun) by the Final Selection Committee of Car of the Year Japan
2007-2008. These factors supported a 9.9% year-on-year increase in
registered vehicle sales. However, MMC was unable to achieve an
increase in total sales for the full fiscal year because of a large drop in
minicar sales, which reflected its decision to refrain from low-margin
transactions.
As a result, Japanese sales in fiscal year 2007 declined 3.5% year on
year to ¥488.5 billion. However, the operating loss narrowed by ¥24.9
billion from the previous fiscal year to ¥18.9 billion. This improvement
reflected higher sales of registered vehicles with high profit margins,
penetration of our profit-oriented sales policy, and benefits from the
regional integration of consolidated sales companies.
In fiscal year 2008, MMC is targeting Japanese retail sales of
207,000 units, down 5.5% from fiscal year 2007, factoring in weak
total demand in Japan.
Japan
In the mature Japanese market, MMC is meeting customer expectations by supplying products that are ‘uniquely
Mitsubishi,’ along with high-quality service. Our new mid-term business plan, Step Up 2010, targets a return to prof-
itability for the domestic business. Toward this end, the company is striving to supply services that fully address
customer needs and enhance customer satisfaction so that MMC products remain the vehicles of choice for custom-
ers over the years to come. Simultaneously, steps are being taken to boost dealership sales, based on sales negotia-
tions as a proportion of total sales volume. The company is also maintaining a profit-oriented sales strategy and
pursuing greater operational efficiency, including the restructuring of its domestic sales network.
Initiatives Under the New Mid-term Business Plan
Step Up 2010 targets a return to profitability for the domestic business
by fiscal year 2010. Specifically, because the prospects for an increase
in total demand are dim and the operating environment is expected to
remain harsh, the plan calls for the steady acceleration of efforts to
build the foundations for growth through the pursuit of greater operat-
ing efficiency and the continuation of a profit-oriented sales strategy.
The key measures and policies for the fiscal year 2008 are: to improve
the profitability of new vehicles; build brand loyalty and lifelong
relationships with customers; make the sales system more efficient;
and bolster the vehicle lineup by introducing new models.
Improving New Vehicle Profitability
Along with the reassessment of transactions with relatively low
profit margins, including fleet sales, MMC is working to improve
new vehicle profitability by increasing the ratio of dealership sales.
At the core of these efforts is the full-scale extension of a sales
capability program, which has proved highly effective at our con-
solidated sales companies, to independent dealerships.
Building Brand Loyalty and Establishing Lifelong Relationships
With Customers
Exhibitions tied to sales and service, improvements and expan-
sion of after-sales services are expected to increase dealer traffic.
Galant Fortis
Regional Topics