Mitsubishi Reports Q1 Loss Amid Fuel Economy Scandal

Mitsubishi Motors posted an operating income of 4.6 billion yen (roughly $43.7 million) during the first quarter of the fiscal year, down 75 percent from the same period a year ago. The automaker said the financial results were influenced by mileage cheating and its effect on sales and production, as well as increased spending to improve quality.

Mitsubishi suffered a loss of 129.7 billion yen (roughly $1.2 billion) during the quarter ending June 30. Much of that is due to a huge loss of 125.86 billion yen ($1.2 billion) related to the fuel economy scandal. Revenue dropped 14 percent to 428.7 billion yen ($4.1 billion).

A few months ago, Mitsubishi admitted to overstating the fuel economy figures on a number of models sold in Japan. The company will spend $480 million to compensate owners of the vehicles affected by the manipulation. Meanwhile, Nissan has stepped up to the rescue by taking a 34 percent controlling stake in Mitsubishi.

Globally, Mitsubishi’s retail sales were down 16 percent last quarter. The fuel economy scandal may have had a direct hit on Japan, which saw Mitsubishi sales decline 43 percent. Meanwhile, sales in North America are up 5 percent thanks to the success of the Outlander CUV.

Mitsubishi has decided to stick with its earlier forecast for the entire fiscal year. It projects a net loss of 145 billion yen ($1.4 billion).

Source: Mitsubishi, Automotive News (Subscription required)

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