Mitsubishi’s Death Dive

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You can almost hear the scream of the engine as the plane dives toward the flight deck in a vertical death dive… Banzai!

Mitsubishi Motor Corp.’s operating profit tumbled 81 percent in the latest quarter, hit by falling sales, foreign exchange rate losses and costs from a fuel economy scandal.

Operating profit dropped to 8.4 billion yen ($72 million) in the Japanese automaker’s fiscal third quarter ended Dec. 31, from 43.6 billion yen ($373.5 million) a year earlier.

Net income fell 74 percent to 6.3 billion yen ($54 million) in the three months, Executive Vice President and CFO Koji Ikeya said, while announcing financial results on Tuesday.

Revenue slid 19 percent to 476.9 billion yen ($4.09 billion), as global retail sales declined 11 percent to 237,000 vehicles in the fiscal third quarter.

Mitsubishi’s operating profit was undercut by falling sales in every market except Japan, where volume only inched ahead, and North America, where sales remained flat from the year before.

Foreign exchange rate losses lopped 26.2 billion yen ($224.5 million) off the company’s quarterly operating profit.

Mitsubishi also took a charge 7.6 billion yen ($65.1 million) in the quarter to cover costs associated with improper fuel economy testing of vehicles sold in the domestic market.

Mitsubishi admitted last year to cheating on fuel-economy ratings for several nameplates sold in Japan. The scandal opened the door for Nissan Motor Co. to take a controlling 34 percent stake in its smaller Japanese rival last autumn.

Ikeya said Mitsubishi is already adopting some streamlined management strategies from its new alliance partner, which contributed positively to the third-quarter earnings.

Mitsubishi’s North American business slid to a 7.3 billion yen ($62.5 million) operating loss in the fiscal third quarter, from a 2.9 billion yen ($24.8 million) operating profit the year before. Regional volume stood unchanged at 32,000 vehicles in the three months, while U.S. sales dipped to 22,000 units, from 23,000 a year earlier. North America is Mitsubishi’s second-smallest market, after the home market of Japan.

Ikeya said Mitsubishi is still grappling with the uncertainty of trade and tax policy changers under new U.S. President Donald Trump. But Mitsubishi has no plans to withdraw from the market, he said. Instead, it plans to increase sales there.

“The Trump administration’s policy is a difficult issue,” Ikeya said. “We are trying to increase our top-line in the Nissan Group, and the U.S. is a very important market. So we will consider various ways to make a recovery there.”

Europe also slumped to an operating loss of 3.6 billion yen ($30.8 million) in the period, compared with a 7.1 billion yen ($60.8 million) operating profit a year earlier. European sales fell 21 percent to 42,000 units.

For the current full fiscal year ending March 31, Mitsubishi expects the North American operating loss to expand to 13.0 billion yen ($111.4 million), reversing last year’s 6.2 billion yen ($53.1 million) operating profit.



  1. I think when they bastardized the Eclipse (3rd gen on, when it went from fw/awd and turbo to just fwd and v6 instead of turbo), didn’t bother updating the Evo (9 years with Just X, should of been on XIII or XIV by then), Also didn’t bother making the Evo more DD friendly (Say if they increased the fuel tank in the hypothetical XI+, add an extra cog in the manual, allow the backseats to fold, etc.) and didn’t bother to reinvent themselves like Hyundai and Kia (Remember when they were just meh), that’s when they died

    They were beastly in the 90’s, wtf happened?

  2. I’m surprised Mitsubishis is even still here in the states. The ongoing recession has pounded the smaller automakers especially hard. Mitsubishis really has no compelling vehicles, just also rans. That may work in a good economy, but doesn’t at all in the poor one we been in over a decade now. “Selling” cars cheaply to people with bad credit is not much of a business plan.

    It’s just another effect of the over regulation in the auto market worldwide, not just the US. They probably don’t have the revenue required for new products in the US. You even see that problem with Chrysler, they don’t have much in the pipeline. The products they do sell in good numbers are about to be regulated away. The feds at some point, will force them to make their pickups with aluminum, like Ford is already doing, and GM is in the process of doing. I don’t see Chrysler even being able to do a project like that, they just don’t have that kind of money anymore. A project, I may add, that doesn’t really do anything for their bottom line.

    • May just work out good for Chrysler. Maybe Mr. Trump will stop the MPG fartwar, and they won’t need to make their P/U’s out of aluminium 😉 -They’ll then not only have avoided wasting all of the retooling and developement money, but will then have the only full-size steel P/U’s available. (Unfortunately, there steel trucks fall apart….so it’s not that much of an advantage. But I’d still rather have steel than aluminum; and just wait till after a few years when these aluminum crapboxes start falling apart. The bodies will be dying even before the electronics go bad!

      • Hi Nunzio,

        Good buddy of mine is a welder at a fab shop and he wouldn’t buy an aluminum-bodied truck, either. Repairing these things involves a much higher level of hassle and expense.

        • Funny thing is, Eric, there seems to be some propaganda out there, making it’s way to the public (and I’ve been hearing people parroting it) that “Aluminum bodies can be repaired just as cheaply[sic!] as steel ones now”. LOL….

          Well yeah, sure, because with modern cars, they basically no longer repair any panels…they just replace ’em. Get a dent in your pick-up bed? Now they slap on a whole bed side, or more likely, a whole bed…so what used to be a relatively minor repair of minor damage, now becomes an expensive major repair….of minor damage- not to mention that aluminum gets damaged even easier/more severely than steel.

          I was talking to a guy about my old F250 which has some moderate rust in the wheel arches of the bed and a few other spots, that can be easily patched with some fiberglass- but I hate, abhor and detest doing body work, so I’ve been asking around…and this guy takes one look at it, and says “Well, you really need a bed side or a whole new bed”!!! (Actually, I’ve had several people tell me that now)- I guess, come the spring, I’ll be out there with the fiberglass doing it myself….. But 20 years ago, before just replacing the panel became the standard operating procedure, any body man would have looked at this truck, and said “No problemo, I’ll just clean that up and smear in some Gorilla Snot, and it’ll be done in a couple of hours”.

          So it’s like: They’ve already inculcated this mentality, so the industry is already primed to accept the aluminum crap, since they’re already basically treating steel as if it’s aluminum.

          Where’s the sanity?!

          • Unfortunately the body shops are in a vise. Wages have been stagnant for decades, your hourly rate is barely high enough to cover it, so the profit gets shifted upstream to replacement panel makers, usually in China, because welding, gluing, or bolting on a cheap new panel cuts the total cost and the craftsmanship out of the repair. The free market in action, I guess, but I cannot help but think that something in the equation is not quite right. And a big part of the cost squeeze is, as usual is government traffic cops at every chickenshit nitpicking level. In this case EPA, zoning, and fire statists keeping little guy startup bodymen who will do the work at a rate of their choosing out of the market.

          • Hi Nunzio,

            I am convinced (as is Brent; he writes about this often as well) that it is the debt-financed system that’s enabled all of this. Almost everyone is living wildly beyond their means – and the rest of us are, unfortunately, carried along by the ripe tide.

            Why pay to fix something old when you can just whip out the AmEx and buy something new?

            • Right-O, gents (Why does that sound English? :D)

              What you guys say is true, and here are some more factors:

              a)The complex shape of modern body parts make them extremely difficult to repair.

              b)The ultra-shiny mirror-like paint makes even the slightest imperfection very noticeable.


              c)They seemed to have indoctrinated people with the idea that repairing isn’t good enough. “Must have new panel!” -and often not a used or Chinese one, either- but a brand spanking new OEM one.

              Between these things that we’ve mentioned, and all of the airbags and everything, it’s no wonder that there are SEAS of late-model wrecks at the salvage auctions every single week across this country; many which could be repaired, but were totaled mainly for the issues we’ve addressed here.

              As if insurance isn’t high enough already- even for those of us who have never caused the co.s to pay out so much as a thin dime, I’m amazed that it’s not rising exponentially every year. It probably will be, soon.

              We’re getting to the point where it’s not only “Throw the part away and just buy another one instead of repairing it”, but now it’s more like “Throw the whole car away”- which is pretty consequential when it’s not at all uncommon for a car to cost $30 or $40K for openers.

              • “They seemed to have indoctrinated people with the idea that repairing isn’t good enough. “Must have new panel!” -and often not a used or Chinese one, either- but a brand spanking new OEM one. “

                The problem is that a new panel after mark up is often cheaper than the labor to get the old one ready for new paint. When labor is $100/hr and a new panel is $200-$300 ready to go…. well do you really want the repaired panel?

                • $100 an hour labor is another measure of the insanity of our era. How much does the average middle class salaried employee earn per hour?

                  Not sustainable…

                  • People say I should just take my cars in to be fixed. Why? The mechanics and body men rates charged to me (not what they get of course) are way more than I make per hour. I could stay home from work to fix my car and still be ahead! So if I can do it, I will. If I can’t there’s a good chance I’ll find a way.

                • Very true, Brent- but nothing wrong with a used one or Chinese one, right? No matter which way ya go, ya still have to prep and paint it (‘cept maybe with a used one, if it’s the right color and ya get lucky and it matches perfectly- and the newer the car, the better the chance of that, as they haven’t had time to fade…)

                  Another problem is: The big insurance pay-outs keeping the shop rates so high and making it so that they’re not even interested in small jobs anymore. It’s hetting so that at a lot of shops, if they can’t make $5K-$6K off of ya, they’re not interested. Small paint work or something for a few hundred bucks? Why bother, when it’s tying up the bay for an insurance job where there’s a lot of room to skim, and they’ll make multiples of that little job and be able to keep more?

                  Not that ya can blame them though. Doing body work sucks….. No ownder many of them are drug addicts!

                • There can be considerably wrong with chinese knock off and used parts have issues too.

                  Same with even domestic aftermarket panels. I see the differences. Hell I see the differences even in OEM original vs. OEM replacement and different revisions.

                  The rear bumper cover on my ’97 is OEM Ford. But the tooling wore and the body guy didn’t clean up the flash that shows. I see it every time I wash the car.

  3. I knew they were in trouble even years ago, when I saw that they couldn’t even afford a few extra cents to put the “T” on the end of “Mitsubishi_”.

  4. I would love to see a chart of all the connections between automobile manufacturers. Seems like everyone is inbreeding with everyone else. Nissan owns part of Mitsubishi. Just watched The Grand Tour episode where they run a Fiat 124 Spider/Mazda MX-5 around the track. VW owns a whole bunch of badges. And then there’s all the Chinese and Indian companies we never hear of in the US.

    Quite a mess. I’m sure much of the reason is to hide money.


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