Mitsubishi sees first annual loss in 3 years

TOKYO: Mitsubishi Motors Corp. reported a quarterly loss Wednesday and said its annual result will plunge into the red for the first time in three years, hit by plummeting global demand and a rising yen.

Japan's fourth-largest automaker said its group net loss will amount to 60 billion yen ($670 million) in the fiscal year through March 2009. The company had earlier projected a net profit of 20 billion yen.

Mitsubishi said sinking demand amid a deepening global downturn and a rising yen were to blame for the dismal forecast, which would mark its first net loss in three years. A strong yen hurts Japanese exporters by eroding their overseas income. Over 80 per cent of Mitsubishi's revenue comes from sales abroad.

The company said its net loss for the fiscal third quarter was 17.6 billion yen, against a net profit of 27.3 billion yen a year earlier. Revenue dropped 30 per cent year-on-year to 444.1 billion yen, and Mitsubishi suffered an operating loss of 5.5 billion yen, reversing from an operating profit of 33.2 billion yen.

Faced with battered sales at home and abroad, Japanese automakers are cutting jobs and production to cope with shrinking global demand.

Mitsubishi said last month it will halt production at its biggest plant in Japan for three weeks in February to weather a prolonged slump in the auto market.

Shares in Mitsubishi Motors rose 2.6 per cent to 117 yen.