19 May 2001: Japanese automaker Mitsubishi Motors Corp has reported its worst-ever loss in the business year to March. The extent of the losses show how large a task it faces in turning its business around.

But the company defiantly forecast it would break even in current earnings terms for the first time in five years within the next year.

Its group net loss for the year ending March 31 surged to $2.27 billion.
It blamed this on flagging domestic sales following the recall of 1.52 million cars worldwide when it admitted it hid defects and customer complaints for more than two decades.

But in a new blow to its fortunes, Mitsubishi Motors said yesterday it is recalling another 203,635 cars in Japan due to potential defects in their fuel tanks. It estimated the cost of the latest recall at four billion yen.

For the year to next March, Mitsubishi expects its group net profit and group current profit to break even. However, some analysts doubt it can do so this year as there are no strong indications yet that domestic (Japanese) sales have bottomed out.

And hoped-for synergies with DaimlerChrysler, which is raising its stake in the company to 37.3 percent from 34 percent, are not expected to manifest themselves until 2003 or 2004.

Mitsubishi's results contrasted with those of Nissan - currently being restructured under Renault. It reported a sharp profit recovery on Thursday, confirming that deep cost-cutting is bearing fruit. CFC