Mitsubishi Motors Announces 3Q FY2006 Financial Results

Tokyo, Japan, Feb. 06, 2007; Mitsubishi Motors Corporation (MMC) today announced its sales and financial results for the first nine months of the fiscal year ending March 31, 2007.

Mitsubishi Motors reported that consolidated net sales in the first nine months of fiscal 2006 (April 1 through December 31, 2006) totaled one trillion 544.1 billion yen, up 14.5 billion yen over the same period last fiscal year (one trillion 529.6 billion yen). The gain stems principally from increased sales of built-up vehicles and from favorable yen exchange rates which offset declines in OEM supply volumes due to the end of production of the smart forfour model at NedCar in the Netherlands and in shipments of parts for use in local production in North Asia and ASEAN countries.

Mitsubishi Motors posted an operating profit of 6.4 billion yen, 24.6 billion yen better than the same period last fiscal year. Factors contributing to this improvement include: the fact that the drop in overall sales volume had only a limited impact on profitability due to the greater ratio of built-up vehicles in overall volume; improved profitability of financial service operations in the United States; favorable foreign exchange rate movements; and, reductions in selling expenses.

Mitsubishi Motors posted an ordinary loss of 6.4 billion yen, a year-on-year gain of 27.4 billion yen that stemmed in part from an improvement in net interest income. The company reported a net loss of 11.8 billion yen for the period, an improvement of 56.3 billion yen. Factors contributing to this improvement include: the elimination of asset impairment charges in Japan and of restructuring charges booked last year; and, extraordinary earnings stemming from the dissolution of a special purpose entity.

The third quarter (October-December) of fiscal 2006 marks the first time Mitsubishi Motors has moved into the black at all levels (operating, ordinary and net profits) since the company started disclosing quarterly results in fiscal 2004.

Global retail sales of vehicles in the first nine months of fiscal 2006 totaled 899,000 vehicles, a decline of 86,000 on the 985,000 sold in the same period in fiscal 2005.

In Japan, MMC sold 170,000 vehicles, a year-on-year increase of 7,000 that reflected continuing stable sales of the Outlander SUV, and sales volume gains resulting from the introduction last year of the new i minicar and Pajero models.

In North America, the company sold 123,000 vehicles, 2,000 more than the same period in fiscal 2005. Factors behind this gain include the introduction of the new Eclipse Spyder in April and the full-scale launch of the new Outlander SUV in November last year.

In Europe, Mitsubishi Motors sold 206,000 vehicles, a year-on-year increase of 11,000, as strong sales in Russia and a doubling of sales in the Ukraine offset slower sales in Germany and the UK.

In Asia and other markets, MMC sold 400,000 vehicles, a decrease of 106,000 over the same period last fiscal year. Firm sales in Latin America, the Middle East, and Africa failed to offset a sharp decline in shipments of parts for local production in Taiwan, China and countries in the ASEAN block.

FY2006 full-year forecasts

Despite an increasingly challenging global market, Mitsubishi Motors aims to return to the black in terms of full-year net profit through the implementation of profit-oriented marketing initiatives. The company stands by the full-year forecasts made at the announcement of the FY2006 1H results: Net sales of 2,230 billion yen, ordinary profit of 21 billion yen and net profit of 8 billion yen.