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07
annual report 2008 mitsubishi motors corporation
Fiscal Year 2007 Performance
In fiscal year 2007, the MMC group reported higher net sales
and earnings growth at all levels, including operating income,
ordinary income and net income, supported by an increase in
overseas sales volume, an improved model mix and the effect
of a weaker yen on average during the fiscal year. Operating
income and ordinary income reached new records.
Worldwide sales volume increased 130,000 units, or 10.6%,
year on year to 1,360,000 units. Net sales rose ¥479.2 billion
year on year to ¥2,682.1 billion on higher overseas sales
volume, the start of SUV supplies to PSA Peugeot Citroën and
a weaker yen against other major currencies. Operating income
improved ¥68.4 billion to ¥108.6 billion, as benefits from
higher sales volume, a better model mix and favorable foreign
exchange rate movements outweighed higher advertising costs
and other selling expenses associated with the launch of new
models in North America and reduced profits in the U.S. sales
finance business. Ordinary income improved ¥67.2 billion to
¥85.7 billion despite slight deterioration in non-operating
income due to foreign exchange losses and other factors. Net
income totaled ¥34.7 billion, an improvement of ¥26.0 billion
from the previous fiscal year, despite ¥14.6 billion in charges
related to the closure of the Australian plant and ¥21.3 billion
asset impairment charges related to production facilities in the
U.S. and others.
Review of the Mitsubishi Motors Revitalization Plan
The MMC group implemented the three-year Mitsubishi Motors
Revitalization Plan to recover customer trust and to restore earn-
ings. Our efforts were supported mainly by Mitsubishi Heavy
Industries, Ltd., Mitsubishi Corporation and Bank of Tokyo-
Mitsubishi UFJ, Ltd., mainly in the form of capital reinforcement
and the deployment of personnel.
The first pillar of the plan was to recover customer trust,
which lies at the heart of business. Here, we worked hard to
change the mindset of employees, improve quality and to
enhance service from the customer’s perspective. These efforts
were guided by the key words ‘Compliance First, Safety First and
Customer First’ under the guidance of the Business Ethics Com-
mittee, which is made up of prominent individuals from outside
the company. As a result, in May 2007, the Committee presented
a report stating that the initial stage was largely complete.
As for the second pillar—restoring earnings—we have pro-
duced steady results. By bolstering our strengths in each business
unit, we have cut back the number of single-market models and
increased the number of global models, rationalized production
overseas, strengthened our sales networks, expanded alliances and
streamlined the portfolio of Group companies.
As a result, the company achieved operating profitability in
fiscal year 2005, one year ahead of schedule, and in fiscal year
2006, net profitability was achieved in accordance with the
initial plan. In fiscal year 2007, the final year of the Mitsubishi
Motors Revitalization Plan, operating income and ordinary
income both reached new records. In light of these facts, it
may be said that our primary goal of building solid profitability
has been achieved.
“STEPPING UP”
from Revitalization to a New Stage