Mitsubishi Motors struggles with massive profit drop as financial challenges hit the Japanese auto giant

Mitsubishi Motors is bracing for a rough financial year as its profits are set to take a massive hit.

The Japanese auto giant has revised its profit forecast, anticipating a sharp decline compared to previous expectations.

According to its latest financial report, Mitsubishi now expects a profit of 35 billion yen ($225 million)—a staggering 77.4% drop from last year’s figures and a steep fall from the previously projected 144 billion yen.

Lower Vehicle Sales Impacting Revenue

The downturn isn’t just about profits; vehicle sales are also expected to take a hit.

Mitsubishi Motors initially aimed to sell 895,000 units this financial year but has now revised that target to 848,000.

This decline in sales is already evident, with the company’s net profit falling 67.7% over the past three quarters.

Possible Merger Could Reshape the Auto Industry

Amid financial struggles, rumors of a possible merger between Honda, Nissan, and Mitsubishi have been making rounds.

If this deal goes through, the newly combined entity could potentially sell up to 8 million vehicles annually, bringing it close to major competitors like Toyota (10.8 million units sold last year) and Volkswagen (9 million units sold).

A Look at Mitsubishi’s Legacy

Mitsubishi Motors has a long-standing history in the automotive industry.

Headquartered in Minato, Tokyo, Japan, it was originally formed in 1970 as part of Mitsubishi Heavy Industries.

Over the years, it has grown into a global brand and was ranked the sixth-largest Japanese automaker in 2011.

Since 2016, Nissan has owned a 34% stake in Mitsubishi, making it a key player in the Renault–Nissan–Mitsubishi Alliance.

Additionally, Mitsubishi Fuso Truck and Bus Corporation, which manufactures commercial vehicles, was once a part of Mitsubishi Motors but is now owned by Daimler Truck, with Mitsubishi retaining a small stake.

The Road Ahead

With declining profits and shifting market dynamics, Mitsubishi Motors faces significant challenges in the coming months.

The potential merger could reshape the company’s future, but for now, the focus remains on navigating financial difficulties and stabilizing sales.

Whether Mitsubishi can turn things around remains to be seen, but one thing is certain—the road ahead will be anything but smooth.

This article was published on TDPel Media. Thanks for reading!

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