Mitsubishi Motors is facing a tough financial year, with the company slashing its net profit forecast by a staggering 76%. The automaker now expects to make just 35 billion yen (about $226 million) by the end of the fiscal year in March, a sharp drop from its previous prediction of 144 billion yen.
The dramatic revision stems from a combination of factors, including weak wholesale sales, rising supplier costs due to inflation, and higher marketing expenses in North America, Nikkei Asia reported. The company also lowered its global sales target for the year, now expecting to sell 848,000 vehicles, down from the previously projected 895,000. While this is still an improvement over the 815,000 units sold last year, it signals ongoing struggles, especially in key markets like Thailand and Indonesia.
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A weakening grip in Southeast Asia
YUICHI YAMAZAKI/Getty Images
Southeast Asia has long been a crucial region for Mitsubishi, but the automaker is losing ground there. CEO Takao Kato pointed to a steep decline in Thailand’s vehicle demand, which once stood at one million units annually but has yet to recover post-pandemic. Household debt and unfavorable exchange rates are worsening the situation, forcing Mitsubishi to restructure its operations in the region, including offering early retirement to 300 employees.
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Throwing a wrench in the Nissan-Honda merger
Reports have indicated that Mitsubishi might sit out a potential merger between Nissan and Honda despite its historical ties to Nissan. While CEO Kato has downplayed speculation that Mitsubishi would be completely excluded, he indicated the company is taking a wait-and-see approach before deciding on any involvement.
Honda
Mitsubishi’s strengths lie in plug-in hybrid technology, pickup trucks, and its presence in the Asia-Pacific market—areas that could complement a larger alliance. However, its lack of scale and investment in North American market growth and auto intelligence development leave it vulnerable in an industry increasingly focused on electrification and technology.
Of course, Mitsubishi can only decide to join a merger if it actually happens. Two people familiar with the merger talks said that Nissan rejected terms from Honda that would have made Nissan a subsidiary of Honda rather than its equal. While talks are continuing, the possibility of the merger falling through completely seems to be increasing.
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A glimmer of hope in North America
Mitsubishi
Despite its struggles globally, Mitsubishi had a relatively strong 2024 in North America, with sales up 26%—the brand’s best result since 2019. The company plans to build on this momentum with an expanded lineup next year. At a meeting with dealers in January, Mitsubishi shared plans to offer “a small crossover-coupe-styled” electric vehicle next year, Automotive News reported.
Final thoughts
That said, Mitsubishi faces an uphill battle. While the company remains small compared to its Japanese rivals, its limited lineup and dealership network leave it both more agile and more exposed. With global carmakers forming alliances to share development costs, Mitsubishi may eventually need to decide whether to remain independent or find a partner.
For now, the company must navigate a shrinking Southeast Asian market, rising costs, and an uncertain role in a rapidly consolidating auto industry.
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