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Delighting the World
ANNUAL REPORT 2012
Year ended March 31, 2012

Table of contents

  • Page 1
    ANNUAL REPORT 2012 Year ended March 31, 2012 Delighting the World

  • Page 2
    ... First Fiscal Year of "Jump 2013," Our Mid-Term Business Plan ...5 Initiatives in Fiscal 2012 to Achieve "Growth and Leap Forward" ...6 Forward-looking Statements This annual report contains forward-looking statements about Mitsubishi Motors Corporation's plans, strategies, beliefs and performance...

  • Page 3
    ...25 Environmental Initiatives ...26 58 Consolidated Subsidiaries and Affiliates ...58 Principal Production Facilities ...60 Investor Information ...61 Drive@earth means that automobiles connect us to the world. Through trust, Mitsubishi vehicles forge a connection to customers, to communities and...

  • Page 4
    ... med-term business plan, "Jump 2013," which commenced in fiscal 2011. Nevertheless, we forged ahead in line with our basic policy of "Growth and Leap Forward," working resolutely toward the unchanged targets set in "Jump 2013." Specifically, we commenced production of the all-new Mirage at our plant...

  • Page 5
    Takashi Nishioka Chairman of the Board Osamu Masuko President MITSUBISHI MOTORS CORPORATION Annual Report 2012 3

  • Page 6
    ...we are pursuing development independently. Leveraging these models, we aim to expand our sales volume in each of the world's regions, build an optimal production structure and bolster production capacity in emerging markets. Osamu Masuko President MITSUBISHI MOTORS CORPORATION Annual Report 2012 4

  • Page 7
    ..."Jump 2013," Our Mid-Term Business Plan Despite a difficult operating environment, income increased, surpassing our profit targets. In fiscal 2011, the first year for "Jump 2013," we sought vigorously to achieve "Growth and Leap Forward" by concentrating business resources in emerging markets and...

  • Page 8
    ... from Russia. Going forward, we plan to expand the launch globally into Japan, China, Australia, North America and other countries. Outlander * An official method of measuring vehicle fuel consumption introduced by the Japanese government. 6 MITSUBISHI MOTORS CORPORATION Annual Report 2012

  • Page 9
    ...hybrid vehicle FY2011 MINICAB-MiEV, Commercial mini EV Mini-truck EV FY2012 FY2013 FY2014 -FY2016 Outlander-based plug-in hybrid vehicles Introduce Seven Models with Electrical Drive Systems in the Three Years from Fiscal 2014 to Fiscal 2016 MITSUBISHI MOTORS CORPORATION Annual Report 2012 7

  • Page 10
    ...-term business plan, "Jump 2013," calls for efforts at increasing production capacity in emerging markets and adjusting it to natural demand in mature markets. With the aim of increasing production capacity in emerging markets, we are expanding in the robust ASEAN region based on a growth strategy...

  • Page 11
    ... income of ¥13 billion. 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 "Jump 2013," our mid-term business plan ending in fiscal 2013, we aim to resume dividend payments...

  • Page 12
    ...over the long term. Accordingly, we are working to further increase sales in this market. In line with this policy, we have formulated "ASEAN Challenge 12," a business strategy that calls for us to boost local production in five major countries in the ASEAN region, and boost our market share in this...

  • Page 13
    ... majority of these vehicles are sold in local markets. In Malaysia, we have licensed PROTON to produce the Inspira, a sister vehicle to the Lancer, and provide parts for knockdown production. Pajero Sport Triton Lancer EX New targets and growth strategy in the ASEAN region Mitsubishi Motors...

  • Page 14
    ...the company is now endeavoring to boost its sales volume by offering 2L and 1.6L Lancer EX models, raising market share in the passenger car segment. We also plan to take advantage of capacity at transmission production and engine assembly plants in the Philippines, making the country a parts supply...

  • Page 15
    ...the Triton, Pajero Sport and Lancer EX, we completed a third factory in April 2012 to manufacture the Mirage. As well as exporting built-up vehicles, MMTh has a component factory for knockdown production. In fiscal 2011, MMTh's total production capacity was 220,000 units, including vehicles for sale...

  • Page 16
    ... ultimate eco-car. Since that time, this model has sold 7,200 units in Japan (as of August 31, 2012). We have also launched the model in overseas markets, including Europe, Hong Kong and Australia, and in November 2011 we commenced sales in North America. To bolster sales further, Mitsubishi Motors...

  • Page 17
    ... than 61km/L * Representative fuel efficiency figure based on a combination of the vehicle's fuel efficiency when driven in all-electric mode, called the plug-in fuel efficiency, and when driven in hybrid mode, called the hybrid fuel efficiency. MITSUBISHI MOTORS CORPORATION Annual Report 2012 15

  • Page 18
    ... (Target) 1,200 987 900 600 300 0 164 94 218 1,001 152 106 218 1,090 167 93 208 Japan North America Europe Asia and Other Regions Total 164 94 218 511 987 152 106 218 525 1,001 167 93 208 622 1,090 511 525 622 2010 2011 2012 (Target) 16 MITSUBISHI MOTORS CORPORATION Annual Report 2012

  • Page 19
    Japan We are working to augment sales by introducing new vehicles, such as the all-new Mirage and the next-generation Outlander. Seiichi Ohta Managing Director, Head Officer of the Headquarters, Domestic Sales Group Headquarters Performance in fiscal 2011 During the first half of fiscal 2011, ...

  • Page 20
    ...-30 -40 -50 2008 (FY) 2009 2010 2011 2012 (Forecast) -28.2 -39.6 -27.9 -26.2 -26.0 Sales Volume (Retail) (Thousands of units) 125 100 75 50 25 0 94 106 93 2010 (FY) 2011 2012 (Target) Outlander Sport North American i electric vehicle 18 MITSUBISHI MOTORS CORPORATION Annual Report 2012

  • Page 21
    ... Executive Vice President (Representative Director), Head Officer of the Headquarters, Overseas Operations Group Headquarters A, In Charge of Overseas Operations Group Headquarters B, In Charge of Global After Sales Group Headquarters Performance in fiscal 2011 In Europe, increasingly severe credit...

  • Page 22
    ...Group Headquarters B Hiroshi Harunari Executive Vice President (Representative Director), Head Officer of the Headquarters, Overseas Operations Group Headquarters A, In Charge of Overseas Operations Group Headquarters B, In Charge of Global After Sales Group Headquarters Performance in fiscal 2011...

  • Page 23
    ...Directors' Meetings Chairman Guidance and Advice President Executive Vice Presidents Quality Audit Internal Audit Quality Affairs Office and Departments Departments CSR Promotion Office Quality Audit and Internal Audit Subsidiaries and Affiliates MITSUBISHI MOTORS CORPORATION Annual Report 2012...

  • Page 24
    ... & CEOMitsubishi Motors North America Inc. Tetsuro Miki Executive Officer Chairman of the Board & CEO-Netherlands Car B.V. Senior Executive Officer Senior Executive Officer President-Mitsubishi COO-NMKV Co., Ltd. Motors (Thailand) Co., Ltd. 22 MITSUBISHI MOTORS CORPORATION Annual Report 2012

  • Page 25
    ... close communications with our business partners as part of our efforts to ensure supply chain integrity. Protection of personal information Based on its Personal Information Protection Policy, MMC is building a management framework to establish internal rules regarding protection of personal...

  • Page 26
    ... all staff members thoroughly comply with business ethics. Shuichi Aoto Managing Director, Chief Business Ethics Officer, Head Officer of the Headquarters, CSR Corporate Affairs, Controlling & Accounting Group Headquarters Framework for the promotion of business ethics In June 2004, MMC established...

  • Page 27
    ... trips or integrated study time to help them learn about the Company. In fiscal 2011, 50 students from five schools visited our headquarters in Tokyo. They discussed product planning, design, the environment, electric vehicles and other topics directly with MMC employees doing actual work in those...

  • Page 28
    ... Vision 2020 MMC formulated the Mitsubishi Motors Group Environmental Vision 2020 in June 2009. MMC has encapsulated its vision for electric vehicles in its environmental policy of "Leading the EV Era, Towards a Sustainable Future." On this basis, MMC aims to work with its customers and communities...

  • Page 29
    ...Income ...34 Consolidated Statements of Comprehensive Income ...35 Consolidated Statements of Changes in Net Assets ...36 Consolidated Statements of Cash Flows ...37 Notes to Consolidated Financial Statements ...38 Report of Independent Auditors ...57 MITSUBISHI MOTORS CORPORATION Annual Report 2012...

  • Page 30
    ... of yen) Net Income (Loss) (Billions of yen) 2,682.1 108.6 1,973.6 1,445.6 40.3 13.9 3.9 34.7 1,828.5 1,807.3 63.7 15.6 23.9 4.8 -54.9 2007 (FY) 2008 2009 2010 2011 2007 (FY) 2008 2009 2010 2011 2007 (FY) 2008 2009 2010 2011 28 MITSUBISHI MOTORS CORPORATION Annual Report 2012

  • Page 31
    ... ballooned into a European crisis, affecting international financial markets and causing business confidence to deteriorate sharply. Fiscal 2011 was the first year for "Jump 2013," the Mitsubishi Motors Group's mid-term business plan, but by the time of implementation the operating environment had...

  • Page 32
    ... yen) Net Assets (Billions of yen) 1,609.4 1,258.7 1,312.5 1,321.3 353.9 353.4 392.7 1,138.0 397.9 348.1 328.1 248.1 265.6 223.0 234.5 2007 (FY) 2008 2009 2010 2011 2007 (FY) 2008 2009 2010 2011 2007 (FY) 2008 2009 2010 2011 30 MITSUBISHI MOTORS CORPORATION Annual Report 2012

  • Page 33
    ...from many partners. Increased demand and other changes in market conditions may cause materials and components prices to increase, thus raising MMC's manufacturing costs and resulting in an impact on MMC results. Leasing, financial services and sales incentives Overcapacity in the auto industry, and...

  • Page 34
    ... and cash equivalents (Notes 13 and 15) Notes and accounts receivable - trade (Notes 3 and 15) Finance receivables (Notes 7 and 15) Inventories (Note 7) Short-term loans receivable Deferred tax assets (Note 18) Other (Note 7) Allowance for doubtful accounts (Note 15) Total current assets 2011 2012...

  • Page 35
    ... shares in 2011 5,537,956,840 shares in 2012 Capital surplus Accumulated deficit Treasury stock - 91,142 shares at March 31, 2011 Treasury stock - 94,665 shares at March 31, 2012 Total shareholders' equity Accumulated other comprehensive income: Valuation difference on available-for-sale securities...

  • Page 36
    ... Statements of Income Mitsubishi Motors Corporation and Consolidated Subsidiaries For the years ended March 31, 2012 and 2011 In millions of yen In thousands of U.S. dollars (Note 2) Net sales Cost of sales Gross profit Selling, general and administrative expenses (Note 10) Operating income...

  • Page 37
    ... Income Mitsubishi Motors Corporation and Consolidated Subsidiaries For the year ended March 31, 2012 and 2011 In millions of yen In thousands of U.S. dollars (Note 2) Income (loss) before minority interests Other comprehensive income Valuation difference on available-for-sale securities...

  • Page 38
    Consolidated Statements of Changes in Net Assets Mitsubishi Motors Corporation and Consolidated Subsidiaries For the years ended March 31, 2012 and 2011 In millions of yen In thousands of U.S. dollars (Note 2) 2012 Shareholders' equity Preferred stock: Balance at beginning of year Preferred stock...

  • Page 39
    ... Statements of Cash Flows Mitsubishi Motors Corporation and Consolidated Subsidiaries For the years ended March 31, 2012 and 2011 In millions of yen In thousands of U.S. dollars (Note 2) 2012 Operating activities: Net income (loss) Adjustments to reconcile net income (loss) to net cash...

  • Page 40
    ... 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 generally accepted accounting principles in Japan. The financial...

  • Page 41
    ... Provision for retirement benefits Accrued retirement benefits for employees at March 31, 2012 and 2011 are calculated based on the retirement benefits obligation and the fair value of the pension plan assets estimated at year end. Prior service cost is being amortized using the straight line method...

  • Page 42
    ... in the balance at March 31, 2012. 4. Property, Plant and Equipment Accumulated depreciation of property, plant and equipment at March 31, 2012 and 2011 was ¥1,068,361 million ($12,998,678 thousand) and ¥1,071,675 million, respectively. 40 MITSUBISHI MOTORS CORPORATION Annual Report 2012

  • Page 43
    ... at March 31, 2012 and 2011 were as follows: (In millions of yen) March 31, 2012 Acquisition Unrealized Unrealized cost gains (losses) Idle assets 9 Other securities: Securities with market value Total The Netherlands and others Production (5 sites) facilities Carrying amount 2,891 ¥2,977...

  • Page 44
    ... 2011 were 2.7% and 3.0%, respectively. Long-term debt at March 31, 2012 and 2011 consisted of the following: 2013 2014 2015 2016 2017 Thereafter Total ¥ 4,220 3,352 1,875 1,295 343 108 ¥11,197 $ 51,351 40,794 22,823 15,768 4,181 1,322 $136,240 42 MITSUBISHI MOTORS CORPORATION Annual Report...

  • Page 45
    ... Eco-Works Co., Ltd. at 2012 and 2011, respectively. Buildings and structures Machinery and equipment Land ¥ 2,370 8,683 3,859 ¥14,914 ¥ 2,559 9,975 3,859 ¥16,393 $ 28,847 105,653 46,958 $181,459 The following groups of assets of a consolidated subsidiary, Pajero Manufacturing Corporation...

  • Page 46
    ... 31, 2012 and 2011, respectively. Equity in earnings of affiliates ¥ 5,932 Foreign exchange gains (losses) 2,418 Litigation expenses (851) Gain (loss) on sales and retirement of property, plant and equipment, net (1,807) Reversal of allowance for doubtful accounts - Gain on sales of subsidiaries...

  • Page 47
    ... equipment (net)" and "Tool, furniture and fixtures (net)"). Cash and bank deposits ¥311,631 ¥317,097 Time deposits with maturities of more than three months (638) (632) Cash and cash equivalents ¥310,993 ¥316,464 $3,791,597 (7,764) $3,783,833 MITSUBISHI MOTORS CORPORATION Annual Report 2012...

  • Page 48
    ... into derivative transactions only with highly rated financial institutions. Trade payables and bank borrowings are exposed to liquidity risk. Each Group company manages these risks, by preparing cash flow projections and other similar tools. 46 MITSUBISHI MOTORS CORPORATION Annual Report 2012

  • Page 49
    ... represent the amount of market risk associated with the relevant derivative transactions. Cash and bank deposits Notes and accounts receivable-trade Finance receivables Allowance for doubtful accounts (*1) Investment (*2) Total assets Notes and accounts payable-trade Short-term loans payable Long...

  • Page 50
    ... adding credit risk premiums based on the credit risk classes. Cash and bank deposits Notes and accounts receivable-trade Finance receivables Allowance for doubtful accounts (*1) Investment (*2) Total assets Notes and accounts payable-trade Short-term loans payable Long-term loans payable Accounts...

  • Page 51
    ... amount 2013 2014 2015 2016 2017 Thereafter Total ¥311,126 ¥140,258 - 2,815 - 2,114 - 295 - 125 - 573 ¥311,126 ¥146,182 ¥26,713 3,594 8,037 15,158 17,086 10,048 ¥80,638 (In thousands of U.S. dollars) March 31, 2012 Notes and Bank accounts Finance deposits receivable- receivables trade...

  • Page 52
    ...Due more Fair value amount than 1 year Pay-fixed, receivefloating (recorded as fair value): Pay-fixed, receivefloating (special hedge provisions): Total Long-term debt Long-term debt $192,339 $192,339 $(733) $ 9,125 - $ 6,083 - (*) $(733) 50 MITSUBISHI MOTORS CORPORATION Annual Report 2012

  • Page 53
    ... (recorded as fair value): Pay-fixed, receivefloating (special hedge provisions): Total Long-term debt Long-term debt ¥9,724 ¥9,724 ¥8 ~ 8.0% for its foreign consolidated subsidiaries at March 31, 2012 and 2011, respectively. The rates of return on plan assets assumed 4,000 ¥ - ¥ 750...

  • Page 54
    ... and Social Structures" (Act No. 114 of 2011) and the "Act for Special Measures for Securing Financial Resources Necessary to Implement Measures for Reconstruction following 37.3 the Great East Japan Earthquake" (Act No. 117 of 2011) were 52 MITSUBISHI MOTORS CORPORATION Annual Report 2012

  • Page 55
    ... their 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, we engage in sales finance and leasing services for Group products. Accordingly, based on...

  • Page 56
    ... location of the customers. (In thousands (In millions of yen) of U.S. dollars) For the year ended March 31, 2011 2012 2012 Net sales: Automobiles Financial services Total Adjustment Grand total Segment income (loss): Automobiles Financial services Total Adjustment Grand total Segment assets...

  • Page 57
    ... 2012 Information on impairment losses relating to property, plant equipment by reportable segments (In thousands (In millions of yen) of U.S. dollars) For the year ended March 31, 2011 2012 2012 Net sales: Japan North America Europe Asia Oceania Other Total Adjustment Grand total Operating income...

  • Page 58
    ...: Business: % of voting 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...

  • Page 59
    Report of Independent Auditors MITSUBISHI MOTORS CORPORATION Annual Report 2012 57

  • Page 60
    ...Motors Parts Sales Co., Ltd. Pajero Manufacturing Co., Ltd. Mitsubishi Automotive Accessories & Products Co., Ltd. Mitsubishi Automotive Logistics Technology Co., Ltd. Mitsubishi Automotive Engineering Co., Ltd. Suiryo Plastics Co., Ltd. Mitsubishi Motors North America, Inc. (MMNA) Mitsubishi Motors...

  • Page 61
    ... (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 2012 59

  • Page 62
    ...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 Motors (Thailand...

  • Page 63
    ...March 31, 2012 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 Listing Securities Code Share Trading Unit Number of Shares Outstanding Number of Shareholders April 22, 1970...

  • Page 64
    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