Mitsubishi 2011 Annual Report Download

Download and view the complete annual report

Please find the complete 2011 Mitsubishi annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 70

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70

Shifting into High Gear
ANNUAL REPORT 2011
Year ended March 31, 2011

Table of contents

  • Page 1
    ANNUAL REPORT 2011 Year ended March 31, 2011 Shifting into High Gear

  • Page 2
    ... driving experience. Importance of continuity Mitsubishi Motors will continue to manufacture distinctive cars with the passion and conviction to overcome all challenges. Forward-looking Statements This annual report contains forward-looking statements about Mitsubishi Motors Corporation's plans...

  • Page 3
    ... Business Ethics Committee Management ...27 ...28 ...29 Responsibility to Society Environmental Initiatives Financial Section ...31 Consolidated Subsidiaries and Affiliates Principal Production Facilities Investor Information ...64 ...66 ...67 MITSUBISHI MOTORS CORPORATION Annual Report 2011...

  • Page 4
    ...January 2011, we announced "Jump 2013," our new three-year mid-term business plan starting in fiscal 2011. At the outset of the August 2011 Takashi Nishioka Chairman of the Board Osamu Masuko President Drive@earth means that automobiles connect us to the world. Through trust, Mitsubishi vehicles...

  • Page 5
    ... original targets and business strategies as we work toward achieving "growth and leap forward." Mitsubishi Motors Corporation wishes to sincerely thank all its stakeholders-including shareholders, customers, business partners and employees-and ask for their ongoing support and guidance in the years...

  • Page 6
    Message from the President We are committed to achieving "growth and leap forward" by concentrating our business resources in emerging markets and on environmental initiatives. Osamu Masuko President 4 MITSUBISHI MOTORS CORPORATION Annual Report 2011

  • Page 7
    ... Mature markets: Japan, North America, Europe (excluding Russia), Australia Mid-Term Business Plan "Jump 2013" Business Strategies Concentrate business resources in emerging markets & environmental initiatives R&D Strengthening global strategic models/ eco-car models Increasing production capacity...

  • Page 8
    ... Yen/â,¬1 Building solid profitability: Restoring earnings and recovering trust 108.6 Mid-Term Business Plans and Operating Income Trends >>>> * The "previous calculation method" included retail units designed by MMC and sold by other manufacturers under a their brand name which provided royalty...

  • Page 9
    ... appreciation 13.9 3.9 FY2008 FY2009 FY2010 We aim to achieve "growth and leap forward" by concentrating business resources in emerging markets and environmental initiatives and by reforming the cost structure. (Fiscal 2011 through fiscal 2013) MITSUBISHI MOTORS CORPORATION Annual Report 2011 7

  • Page 10
    ... collaborative efforts with overseas production hub 15% decrease in C-segment platform FY2010 FY2013 (Target) FY2015 (Target) Promote cutbacks in of platforms Expand economies of scale for common parts Number of platforms: 12 9 6 8 MITSUBISHI MOTORS CORPORATION Annual Report 2011

  • Page 11
    ... truck production in Thai factory l Nissan Motor: Collaboration on development and production of successor to one-ton pickup truck, receipt of high-end sedan model for Japanese market Increasing Profit-Earning Opportunities / Bolstering Profitability MITSUBISHI MOTORS CORPORATION Annual Report 2011...

  • Page 12
    ... billion by the end of fiscal 2012. Finally, we consider our capital strategy to be of utmost importance for Mitsubishi Motors. Although we have not paid dividends on common stock for some time, during the term of the Jump 2013 new mid-term business plan we aim to resume dividend payments. First, it...

  • Page 13
    ...Jump 2013, MMC's New Mid-Term Business Plan By aggressively rolling out new electric and plug-in hybrid vehicles while at the same time introducing the affordable and fuel-efficient "Global Small" compact car, MMC will concentrate its operating resources in emerging markets and pursue environmental...

  • Page 14
    ... Control system (MIVEC), which MMC plans to begin rolling out in succession by including it on models to be i-MiEV New-generation electric vehicle MINICAB-MiEV Light commercial EV (Test vehicle) Mitsubishi Concept PX-MiEV Equipped with the Mitsubishi Plug-in Hybrid System Launching a Total...

  • Page 15
    ... plans to commence production in March 2012 at a new plant that is under construction in Thailand. From there, we will successively ship the model into the ASEAN, Japanese, U.S., European and other world markets. MITSUBISHI Concept Global Small MITSUBISHI MOTORS CORPORATION Annual Report 2011 13

  • Page 16
    ... in in Thailand, w which is s currently under construction, ruct uc to b bo boost oost oos o t sales sa in n the he ASEAN AS ASEAN region and supply vehicles throughout ghout out th the h wo he w world. Triton MITSUBISHI Concept Global Small 14 MITSUBISHI MOTORS CORPORATION Annual Report 2011

  • Page 17
    ...local partner. er. In this manner, we w will cultivate business in Brazil a and in regio ns regions avorable tariff considerations co offering favorable kets in Mercos Andea an for markets Mercosur and the Andean Commun nity. Community. Pajero Sport MITSUBISHI MOTORS CORPORATION Annual Report 2011...

  • Page 18
    ...the growing Chinese market. United States: Introducing a new model to be produced at MMC's Illinois plant In 2012, MMC plans to commence production of its compact SUV, the Outlander Sport (RVR in Japan, ASX in Europe) at its Illinois plant. Amid growing global demand for compact cars, the Outlander...

  • Page 19
    ...in 2006 to respond swiftly to quality-related information from customers. The SQM-BC manages consolidation of Notes: *1 MMC uses the term "human assets" because it sees people as key assets. *2 SQM-BC: Strategic Quality Management-Backward Chain MITSUBISHI MOTORS CORPORATION Annual Report 2011 17

  • Page 20
    ... The previous calculation method included retail units designed by MMC and sold by other manufacturers under their brand name that provided royalty income. *2 The new calculation method, initiated in fiscal 2011, includes only MMC-branded units. 18 MITSUBISHI MOTORS CORPORATION Annual Report 2011

  • Page 21
    ... light commercial vehicle, we will cultivate a brand image that equates Mitsubishi with electric vehicles. Seiichi Ohta Managing Director, Head Officer of the Headquarters, Domestic Sales Group Headquarters Performance in fiscal 2010 During the first half, retail sales volume in Japan rose 16% year...

  • Page 22
    ... an electric vehicle designed specifically for the North American market and based on the i-MiEV. Fumio Kuwayama Executive Officer, Head Officer of the Headquarters, Overseas Operations Group Headquarters B and Corporate General Manager of North America Office Performance in fiscal 2010 Our retail...

  • Page 23
    ...boost unit sales of electric vehicles and reduce CO2 emissions of our mainstay models. Hiroshi Harunari Executive Vice President (Representative Director), Head Officer of the Headquarters, Overseas Operations Group Headquarters A, Corporate General Manager of Overseas Business Management Office, In...

  • Page 24
    ... Executive Vice President (Representative Director), Head Officer of the Headquarters, Overseas Operations Group Headquarters A, Corporate General Manager of Overseas Business Management Office, In Charge of Overseas Operations Group Headquarters B, In Charge of Global After Sales Group Headquarters...

  • Page 25
    ... President Managing Directors' Meetings Executive Vice Presidents Quality Audit Internal Audit Guidance and Advice Quality Affairs Office and Departments Departments CSR Promotion Office Quality Audit and Internal Audit Subsidiaries and Affiliates MITSUBISHI MOTORS CORPORATION Annual Report 2011...

  • Page 26
    ...management system centered on the committee. Business continuity plans Learning from its experience of the Great East Japan Earthquake, MMC has formulated business continuity plans (BCPs) based on scenarios to respond to earthquakes, epidemics and 24 MITSUBISHI MOTORS CORPORATION Annual Report 2011

  • Page 27
    ... them. Promoting business ethics In fiscal 2010, MMC held compliance training sessions featuring specific case studies and outside instructors as part of a training program for directors and code leaders. The program featured training sessions for MMC Group companies in Japan (including exclusive...

  • Page 28
    ... Committee The Mitsubishi Motors Business Ethics Committee was established in June 2004 as an advisory body to the Board of Directors of MMC. At that time, the recall problem had reignited and MMC faced a crisis concerning the Company's survival due to the loss of confidence and trust of society...

  • Page 29
    ...-Mitsubishi Motors (Thailand) Co., Ltd. Executive Officer Executive Vice PresidentMitsubishi Motors (Thailand) Co., Ltd. Executive Officer Executive Officer President-Mitsubishi President & CEOMitsubishi Motors North Motors Europe B.V. America Inc. MITSUBISHI MOTORS CORPORATION Annual Report 2011...

  • Page 30
    ... corporate citizen, Mitsubishi Motors aims to contribute to the development of a sound and sustainable society. Masao Omichi Senior Executive Officer, Chief Environmental Strategy Officer, Corporate General Manager of CSR Promotion Office and Assistant to President MMC is tackling four key themes...

  • Page 31
    ...hybrid or other electric-powered vehicle CO2 Emissions Reduction Targets in the Mitsubishi Motors Group Environmental Vision 2020 CO2 produced during use Compared with fiscal 2005 levels Improve the fuel economy of gasoline and diesel vehicles Total production ratio of EVs Factory-produced CO2 50...

  • Page 32
    ... management that is integrated with affiliates l Expanded application of lifecycle assessment in product development l Enhancement of environmental information disclosure and environmental communications l Promotion of systematic environmental education 30 MITSUBISHI MOTORS CORPORATION Annual...

  • Page 33
    ... ...38 Consolidated Statement of Comprehensive Income . .39 Consolidated Statements of Changes in Net Assets ...40 Consolidated Statements of Cash Flows ...41 Notes to Consolidated Financial Statements ...42 Report of Independent Auditors ...63 MITSUBISHI MOTORS CORPORATION Annual Report 2011 31

  • Page 34
    ...financial statements are converted, solely for convenience, at a rate of ¥83.15 = U.S.$1.00, the exchange rate prevailing on March 31, 2011. Net Sales... 2007 2008 2009 2010 2006 (FY) 2007 2008 2009 2010 2006 (FY) 2007 2008 2009 2010 32 MITSUBISHI MOTORS CORPORATION Annual Report 2011

  • Page 35
    ... steady profits. However, many businesses in the automotive industry suffered serious damage from the Great East Japan Earthquake, which struck on March 11, 2011. This situation resulted in parts supply issues, which in turn affected the MMC Group's automobile production. down in Canada and Mexico...

  • Page 36
    ... yen) Net Assets (Billions of yen) 1,778.7 1,609.4 1,258.7 1,312.5 503.8 308.3 1,138.0 353.9 353.4 392.7 397.9 328.1 248.1 223.0 234.5 2006 (FY) 2007 2008 2009 2010 2006 (FY) 2007 2008 2009 2010 2006 (FY) 2007 2008 2009 2010 34 MITSUBISHI MOTORS CORPORATION Annual Report 2011

  • Page 37
    ... in the North American market, has led to the necessity of sales incentives in sales promotion efforts. The sales incentives MMC uses in promotions reduce the selling price of new vehicles. It is possible that the use of incentives will lower resale values in the used car market and residual values...

  • Page 38
    ...accounts receivable-trade (Notes 4, 8 and 16) Finance receivables (Notes 4, 8 and 16) Inventories (Note 8) Short-term loans receivable Deferred tax assets (Note 19) Other (Note 8) Allowance for doubtful accounts (Note 16) Total current assets 2011...36 MITSUBISHI MOTORS CORPORATION Annual Report 2011

  • Page 39
    ... net assets Current liabilities: Notes and accounts payable-trade (Note 16) Short-term loans payable (Notes 8 and 16) Current portion of long-term debt (Notes 8 and 16) Lease obligations (Note 8) Accounts payable-other and accrued expenses (Notes 7 and 16) Income taxes payable (Note 19) Other Total...

  • Page 40
    Consolidated Statements of Income Mitsubishi Motors Corporation and Consolidated Subsidiaries For the years ended March 31, 2011 and 2010 In millions of yen In thousands of U.S. dollars (Note 3) Net sales Cost of sales Gross profit Selling, general and administrative expenses (Note 11) Operating ...

  • Page 41
    ... Minority interests See accompanying notes to consolidated financial statements. 2011 ¥19,083 4,975 3,146 (7,767) (2,065) ¥ (1,710) ¥17,372 ¥14,476 ¥ 2,896 2011 $229,504 59,842 37,838 (93,419) (24,837) $ (20,577) $208,927 $174,095 $ 34,831 MITSUBISHI MOTORS CORPORATION Annual Report 2011 39

  • Page 42
    Consolidated Statements of Changes in Net Assets Mitsubishi Motors Corporation and Consolidated Subsidiaries For the years ended March 31, 2011 and 2010 In millions of yen In thousands of U.S. dollars (Note 3) 2011 Shareholders' equity Preferred stock: Balance at beginning of year Preferred stock...

  • Page 43
    ...Purchase of property, plant and equipment (Note 14) Proceeds from sales of property, plant and equipment (Note 14) Net decrease (increase) in investments in securities Decrease (increase) in short-term loans receivable Decrease (increase) in long-term loans receivable Other, net Net cash provided by...

  • Page 44
    ... Statements Mitsubishi Motors Corporation and Consolidated Subsidiaries 1. Significant Accounting Policies (a) Basis of preparation MMC and its domestic consolidated subsidiaries maintain their books of account in conformity with the financial accounting standards of Japan. The financial statements...

  • Page 45
    ... stock to be issued upon the conversion of preferred stock and stock options. (m) Derivative financial instruments MMC and its consolidated subsidiaries are exposed to risks arising from fluctuations in foreign currency exchange rates and interest MITSUBISHI MOTORS CORPORATION Annual Report 2011...

  • Page 46
    ...sales buildings and operations others Land, buildings and others Machinery and equipment, furniture and fixtures and others ¥ 76 $ 920 Idle assets 9 115 The Netherlands and others Production (5 sites) facilities 2,891 ¥2,977 34,774 $35,810 44 MITSUBISHI MOTORS CORPORATION Annual Report...

  • Page 47
    ... Securities with market value Total ¥28,722 ¥28,722 ¥10,164 ¥10,164 ¥18,564 ¥18,564 ¥(6) ¥(6) Idle assets Land 6 ¥214 The groupings of assets are determined as follows: Assets used in production are grouped either by manufacturing plants or by operational sites. Assets used in sales...

  • Page 48
    ...2012 2013 2014 2015 2016 Thereafter Total ¥ 5,265 3,290 2,651 1,156 609 380 ¥13,354 $ 63,330 39,574 31,892 13,912 7,326 4,573 $160,609 Assets pledged as collateral for short-term loans payable, longterm debt and guarantees (excluding factory related groups of assets) at March 31, 2011 and 2010...

  • Page 49
    ...18,430 812 2,235 ¥27,210 $ 65,021 205,271 8,684 26,881 $305,858 Short-term loans payable Current portion of longterm debt Long-term debt ¥ 52,051 ¥ 45,159 16,467 62,318 55,827 25,100 ¥124,347 ¥132,578 $ 626,000 198,051 671,410 $1,495,462 MITSUBISHI MOTORS CORPORATION Annual Report 2011 47

  • Page 50
    ...at March 31, 2011 and 2010, respectively. Equity in earnings of affiliates Foreign exchange gains (losses) Litigation expenses Gain on sales of investments in securities Gain (loss) on sales and retirement of property, plant and equipment, net Reversal of allowance for doubtful accounts Reversal of...

  • Page 51
    ... of the leased assets: Property, plant and equipment Leased assets principally include, but are not limited to, production facilities for the automobile business ("Machinery and equipment (net)" and "Tool, furniture and fixtures (net)"). MITSUBISHI MOTORS CORPORATION Annual Report 2011 49

  • Page 52
    ...risk of market price fluctuation. However, such securities are composed of mainly the stocks of companies with which the Group has business relationships. Trade payables, which include notes payable and accounts payable, are mostly expected to be settled within one year. While trade payables include...

  • Page 53
    ...credit risk classes respectively. Investment securities The fair values of investment securities are based on the market value. Refer to Note 6, "Investments", regarding the details of the securities classified by the purpose of holding. Liabilities Notes and accounts payable-trade, Short-term loans...

  • Page 54
    ...the long-term loans payable subsequent to March 31, 2011 Refer to Note 8 "Short-term Loans payable, Long-term Debt and Lease Obligations". (Additional information) Effective from the year ended March 31, 2010, MMC has adopted the "Accounting Standard for Financial Instruments" (ASBJ Statement No. 10...

  • Page 55
    ...Unrealized Fair value than 1 year gain (loss) Forward foreign exchange contracts: Sell: Japanese ¥ Total Interest Income $1,064,701 $ - $- $52,770 $- $52,770 Interest rate options: Buy: Total ¥12,852 ¥ - ¥12,852 ¥ - ¥10 ¥10 ¥10 ¥10 MITSUBISHI MOTORS CORPORATION Annual Report 2011 53

  • Page 56
    ... ¥7,637 ¥ - ¥3,000 ¥ - (*) - (*) As interest rate swaps under the special hedge provisions are accounted together with hedged item (long-term loans payable), their fair values are reflected in the fair value of long-term loans payable. 54 MITSUBISHI MOTORS CORPORATION Annual Report 2011

  • Page 57
    ... based on the tax rates applicable in their countries of incorporation. The consolidated tax payment system is applied at March 31, 2011 and 2010. The effective tax rates reflected in the accompanying consolidated statements of operations for the year ended March 31, 2011 and 2010 differ from the...

  • Page 58
    ... new standard. Current assets Non-current assets Current liabilities Non-current liabilities Net deferred tax liabilities ¥ 3,218 ¥ 2,007 9,188 6,060 (9) - (27,650) (20,750) ¥(15,253) ¥(12,682) $ 38,702 110,505 (114) (332,541) $(183,447) 56 MITSUBISHI MOTORS CORPORATION Annual Report 2011

  • Page 59
    ... Board of Directors to make decisions about resource allocation to the segments and to assess performance. The main business of the Group is automobile business, involving development, design, manufacturing and sales of automobiles and component parts. In addition, as financial service business...

  • Page 60
    ... U.S. dollars) For the year ended March 31, 2011 2011 (Note) Main countries and regions outside Japan are grouped as follows: (1) North America ...The United States (2) Europe ...The Netherlands, Germany, Russia, (3) Asia ...Thailand, The Philippines (4) Oceania ...Australia, New Zealand (5) Other...

  • Page 61
    Information on impairment loss of property, plant equipment by reportable segments (In millions (In thousands of yen) of U.S. dollars) For the year ended March 31, 2011 2011 (In millions of yen) For the year ended March 31, 2010 Impairment loss: Automobiles Financial services Total ¥2,977 - ¥2,...

  • Page 62
    ...of business activities. 2. Main countries and regions outside Japan are grouped as follows: (1) North America ...The United States (2) Europe ...The Netherlands (3) Asia ...Thailand, Philippines (4) Other ...Australia, New Zealand, U.A.E., Puerto Rico 60 MITSUBISHI MOTORS CORPORATION Annual Report...

  • Page 63
    ... stock held: Relationship with the Related Party: Detail of transaction: Transaction amount: Account title: Balance at year end: Major shareholder Mitsubishi Corporation Chiyoda-Ku, Tokyo, Japan ¥203,598 million Wholesale trading Direct 13.99 Indirect 0.00 Sales of products; import of materials...

  • Page 64
    ... market price at exercise date: Fair evaluation price on grant date: - - - - - 966,000 - 58,000 908,000 - ¥173 ¥178 - 26. Business Combinations No significant matters to disclose. 27. Subsequent Event No significant matters to disclose. 62 MITSUBISHI MOTORS CORPORATION Annual Report 2011

  • Page 65
    Report of Independent Auditors MITSUBISHI MOTORS CORPORATION Annual Report 2011 63

  • Page 66
    ... Thailand Philippines Philippines U.A.E. Japan Japan Japan Japan Japan Japan Japan Japan Japan Portugal Vietnam Mitsubishi Heavy Industries, Ltd. Japan Japan * 1. Figures in parentheses represent indirect shares. 2. Specified subsidiaries. 64 MITSUBISHI MOTORS CORPORATION Annual Report 2011

  • Page 67
    ... (In millions) Business Lines MMC Share of Voting Rights (%)*1 JPY 265,608 Shipbuilding & ocean systems development, power systems, machinery & 15.7 (0.5) steel structures, aerospace, general machinery and special vehicles and others MITSUBISHI MOTORS CORPORATION Annual Report 2011 65

  • Page 68
    ... Country/Region Name Major Products Japan 1. Nagoya Plant-Okazaki 2. Mizushima Plant 3. Pajero Manufacturing Co., Ltd. 4. Powertrain Plant-Kyoto 5. Powertrain Plant-Shiga 6. Powertrain Plant-Mizushima 7. Mitsubishi Motors North America, Inc. (MMNA) 8. Netherlands Car B.V. (NedCar) 9. Mitsubishi...

  • Page 69
    ... of March 31, 2011 Company Name Head Office MITSUBISHI MOTORS CORPORATION 5-33-8, Shiba, Minato-ku, Tokyo 108-8410, Japan Telephone: +81-3-3456-1111 Established Capital Number of Employees Stock Listings Securities Code Share Trading Unit Number of Shares Outstanding Number of Shareholders April 22...

  • Page 70
    5-33-8, Shiba, Minato-ku, Tokyo 108-8410, Japan Public Relations Dept. Tel: +81-3-6852-4206 (IR) +81-3-6852-4274 (Corporate PR) Fax: +81-3-6852-5405 http: //www.mitsubishi-motors.com Printed in Japan