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(¥ billion, units)
FY2009 Actual 1FY2010 Forecast 2Change 2 – 1
Net Sales 1,445.6 1,900.0 +454.4
Operating Income 13.9 45.0 +31.1
Ordinary Income 13.0 30.0 +17.0
Net Income 4.8 15.0 +10.2
Sales Volume (Retail) 96.0 112.1 +16.1
Assumed Forex Rate (Yen) USD 92
EUR 130
AUD 79
USD 90
EUR 120
AUD 82
Note: Sales volume figures exclude OEM supplies.
FY2010 Results Forecast Summary (vs. FY2009 Actual)
Performance Outlook
Aiming for Increases in Revenue and Profit with Increase in Sales Volume and
Further Cost Reductions
—Increase in sales volume will be driven by the new compact SUV
The Step Up 2010 mid-term business plan which we announced in February 2008 included an operating income
target of ¥90 billion in fiscal 2010, the final year of the plan.
However, the environment surrounding the automobile industry that we envisioned when formulating the plan
has changed significantly, and the bankruptcy of a major U.S. financial institution in September 2008 brought about
three serious problems for the Japanese automobile sector: a drastic decline in retail sales volume, the credit
crunch, and the appreciation of the yen. In conjunction with this dramatic change in the business environment, in
fiscal year 2008 we were unable to avoid a considerable decline in both sales and profits. Still, by taking emer-
gency measures in the face of the economic crisis, such as production cutbacks to reduce excess inventories and
implementing rigorous cost reductions, we were able to secure operating profit.
In fiscal 2009, we took steps to optimize inventories and accelerated shipments to recovering markets, in addi-
tion to carrying out thorough cost reduction initiatives. These activities led to a turnaround in the bottom line
despite a decline in sales, and we successfully achieved our initial target of returning to net profitability.
In fiscal 2010, we expect an increase in both sales and profits on the back of higher sales volume and enhanced
cost reductions, and have set an operating income target of ¥45 billion. Our current assumptions are much less
optimistic than at the time of the Step Up 2010 plan, as we are now assuming a roughly 300,000 unit decline in
sales volume and a ¥15 appreciation against the U.S. dollar. This will certainly result in profits undercutting our
forecasts in our Step Up 2010 mid-term business plan. Nonetheless, we will work to regain our footing through
such measures as curbing personnel expenses, reducing advertising expenditure, and further enhancing our cost
reduction programs, and expect operating income to recover to one-half of the ¥90 billion we set as an operating
income target for the last year of Step Up 2010.
We have seen a harsh business environment since the second half of fiscal 2008, but during this time we have
taken steps to enhance our business platform by bolstering our strengths. In fiscal 2010, we will improve profitabil-
ity by rolling out our new compact SUV around the globe as demand recovers, particularly in emerging countries,
which will lead to growth and a significant leap forward in fiscal 2011 and beyond.
08
MITSUBISHI MOTORS CORPORATION Annual Report 2010