Mitsubishi 2009 Annual Report Download - page 32

0.2
4.0
1.8
0.3
012345
08
07
06
05
04
1,973.6
2,682.1
2,202.9
2,120.1
2,122.6
0 500 1,000 1,500 2,000 2,500 3,000
08
07
06
05
04
1,066
1,360
1,230
1,344
1,312
0 500 1,000 1,500
Net Sales/Operating MarginRetail Sales
(FY)
(FY)
(¥ billion)(Thousand units)
(%)
Financial Results and Discussion
Operational Review
During the first half of the fiscal year under review, while emerg-
ing economies such as BRICs and the markets in resource-rich
countries showed robust growth, advanced industrial countries
including Japan experienced a mild slowdown in their econo-
mies. This was due to the turmoil in the financial markets in the
U.S. and Europe triggered by the U.S. subprime mortgage crisis
and sharp rises in raw material prices, which hovered at high
levels, such as crude oil. In the second half of fiscal 2008, the
collapse of a financial institution in the U.S. caused a global finan-
cial crisis and credit crunch, and the global economy worsened at
an unprecedented speed, width and depth. Coupled with the
significant strengthening of the yen, the environment surround-
ing the operations of Mitsubishi Motors Corporation (MMC)
sharply deteriorated to an uncharted level.
Amidst this business environment, the MMC Group entered
the first fiscal year of “Step Up 2010,” its mid-term business plan
announced in February 2008, aiming to bolster its strengths and
secure steady profits. Concerted efforts have been made to
address issues such as restoring domestic business profitability,
ensuring the stability of North American operations, establishing
a production system capable of timely response to market needs,
and developing environmental technologies. Additionally,
emergency measures were implemented in order to cope with
the current economic crisis, including production adjustments to
lower inventories and even more rigorous cost reduction activities.
However, this was not sufficient to offset the negative impact
augmented by the substantial drop in vehicle sales due to the
deteriorating global economy and appreciation of the yen. As a
result, the MMC Group posted declining figures in net sales,
operating income, ordinary income and net income compared to
the previous year’s results.
Results of Operations
Retail Sales Volume
The overall demand for vehicles was sluggish worldwide, and
amidst this environment, retail sales dropped in all geographical
regions (i.e., Japan, North America, Europe, and Asia and Other
Regions). For the year ended March 31, 2009, MMC reported
global retail sales of 1,066,000 units (down 294,000 units or 22%
compared to the previous fiscal year). Unit sales by region are
reported as follows.
In Japan, MMC aimed to increase sales through the introduc-
tion of new models, including the September launching of new
minicars such as the Toppo, and the December launching of the
Galant Fortis Sportback. However, a sharp decline in overall
demand, particularly from November on, had a negative impact
on sales. As a result, sales fell to 168,000 units (down 51,000 units
or 23%).
In North America, despite increasing sales in Canada, the
slump in overall demand in the U.S. resulted in a decline in
regional sales to 119,000 units (down 41,000 units or 26%).
In Europe, in addition to declining vehicle sales in Western
European markets where overall demand was low, the solid
growth experienced to date in the Russian market turned nega-
tive in the second half of fiscal 2008. All combined, regional sales
totaled 272,000 units (down 69,000 units or 20%).
In Asia and Other Regions, countries such as Brazil, Indonesia
and the Philippines recorded increases in sales. However,
Malaysia, where production parts and components supplies to
Proton have ended, and other countries experienced declining
sales. Consequently, the combined regional sales totaled 507,000
units (down 133,000 units or 21%).
n Net Sales
n
Operating Margin (%)
30 MITSUBISHI MOTORS CORPORATION Annual Report 2009