Mitsubishi back on track with new models
Mitsubishi Motors lost about three-fourths of its market value in 2004 amid vehicle recalls linked to two fatal crashes. Now, the shares may rise as much as 34% as its sales growth outpaces Toyota Motor’s.
By Agencies |
TOKYO: Mitsubishi Motors lost about three-fourths of its market value in 2004 amid vehicle recalls linked to two fatal crashes. Now, the shares may rise as much as 34% as its sales growth outpaces Toyota Motor’s.
Mitsubishi Motors, which almost collapsed three years ago when its former truck unit admitted, covering up defects, posted a 14% gain in global sales last quarter compared with 3.4% for Toyota. The automaker is winning buyers with restyled Lancer sedans and the Outlander small sport-utility vehicle.
“New models that came out recently are attractive and unique enough to lure customers,” said Hitoshi Yamamoto, who manages $1 billion in Japanese equities as president of Commerz International Capital Management Japan in Tokyo.
“Mitsubishi Motors is in much better position now than a few years ago, when everyone thought it would go bankrupt.”
Rising sales in the US and Europe will help more than double net income to 20 billion yen ($173 million) this fiscal year, the Tokyo-based automaker forecasts. The company’s profit for the 12 months ended March 31 was its first in four years.
Nikko Citigroup analyst Noriyuki Matsushima, in a July 31 report, predicted the shares may reach 220 yen in the next year. They fell 1.2% to 161 yen at the close of trading on the Tokyo Stock Exchange and are down 18% for 2007.
“The company has been regaining trust from the public by improving quality,” said Koichi Ogawa, who helps oversee $28 billion at Daiwa SB Investments in Tokyo.
Mitsubishi Motors projects global sales of 1.32 million vehicles this business year, up 7.4%. Still, that would be short of the 1.53 million in the year ended in March 2004 — just as the company began sliding toward a near-collapse.
By March 2005, Mitsubishi and former truck unit Mitsubishi Fuso Truck & Bus, now majority-owned by DaimlerChrysler, recalled about 2.87 million vehicles for defects. Japan’s Ministry of Land, Infrastructure and Transport cited the defects in two fatal truck accidents, and Fuso said ex-officials hid flaws in vehicle clutch housings. Mitsubishi Motors also acknowledged not reporting all known defects in a 2000 recall.
The automaker’s worldwide sales fell 14%. As losses over three years reached 782 billion yen, the company twice had to seek bailouts. DaimlerChrysler, which bought 37% of the automaker in 2000 and 2001, refused to join a 2004 rescue and later dumped its stake.
Mitsubishi Motors shares plunged to an all-time low of 76 yen on August 4, 2004, shedding 77% from their peak less than four months earlier. The company shelved television advertising in Japan for three months and bought ads in 62 newspapers in September to apologise.
Mitsubishi Motors, which almost collapsed three years ago when its former truck unit admitted, covering up defects, posted a 14% gain in global sales last quarter compared with 3.4% for Toyota. The automaker is winning buyers with restyled Lancer sedans and the Outlander small sport-utility vehicle.
“New models that came out recently are attractive and unique enough to lure customers,” said Hitoshi Yamamoto, who manages $1 billion in Japanese equities as president of Commerz International Capital Management Japan in Tokyo.
“Mitsubishi Motors is in much better position now than a few years ago, when everyone thought it would go bankrupt.”
Rising sales in the US and Europe will help more than double net income to 20 billion yen ($173 million) this fiscal year, the Tokyo-based automaker forecasts. The company’s profit for the 12 months ended March 31 was its first in four years.
Nikko Citigroup analyst Noriyuki Matsushima, in a July 31 report, predicted the shares may reach 220 yen in the next year. They fell 1.2% to 161 yen at the close of trading on the Tokyo Stock Exchange and are down 18% for 2007.
“The company has been regaining trust from the public by improving quality,” said Koichi Ogawa, who helps oversee $28 billion at Daiwa SB Investments in Tokyo.
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Mitsubishi Motors projects global sales of 1.32 million vehicles this business year, up 7.4%. Still, that would be short of the 1.53 million in the year ended in March 2004 — just as the company began sliding toward a near-collapse.
By March 2005, Mitsubishi and former truck unit Mitsubishi Fuso Truck & Bus, now majority-owned by DaimlerChrysler, recalled about 2.87 million vehicles for defects. Japan’s Ministry of Land, Infrastructure and Transport cited the defects in two fatal truck accidents, and Fuso said ex-officials hid flaws in vehicle clutch housings. Mitsubishi Motors also acknowledged not reporting all known defects in a 2000 recall.
The automaker’s worldwide sales fell 14%. As losses over three years reached 782 billion yen, the company twice had to seek bailouts. DaimlerChrysler, which bought 37% of the automaker in 2000 and 2001, refused to join a 2004 rescue and later dumped its stake.
Mitsubishi Motors shares plunged to an all-time low of 76 yen on August 4, 2004, shedding 77% from their peak less than four months earlier. The company shelved television advertising in Japan for three months and bought ads in 62 newspapers in September to apologise.
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“We have faced the unparalleled hardships because of the recall-related problem,” president Osamu Masuko said at a Tokyo press conference on March 30, 2005.Download
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