MITSUBISHI Motors Corp, Japan's second-least profitable auto maker, posted first-half net income for the first time in six years, as the yen weakened against the dollar and euro.
Net income totaled about 12.5 billion yen (US$125 million) for the six months to September 30, compared with a loss of 5.63 billion yen a year earlier, the Tokyo-based auto maker said in a preliminary earnings statement yesterday. The company had previously forecast it would break even, Bloomberg News reported.
A weaker yen boosted the value of Mitsubishi Motors' overseas earnings when repatriated, helping the auto maker offset fewer auto sales than it expected. Industrywide sales in North America, Europe and Japan slumped in the period as higher fuel costs and the credit crisis damped consumer confidence.
"The company was just lucky as exporters are beneficiaries of a weaker yen," said Tsuyoshi Segawa, an equity strategist at Shinko Securities Co in Tokyo.
"The situation is still tough for all auto makers because the slowing global economy and tighter credit may further cut auto demand."
The maker of Lancer Evolution sports sedan based its first-half earnings on exchange rates of 106 yen to the dollar and 164 yen per euro, compared with a forecast of 100 yen and 155 yen, respectively.
The auto maker's sales in the period were 1.21 trillion yen, 2.9 percent less than its estimate. Mitsubishi Motors sold 602,000 vehicles in the six-month period, down 4.1 percent form its estimate of 628,000, the company said. It sold 691,000 units in the same period in 2007.
Operating profit totaled about 25 billion yen, compared with its estimate of 15 billion yen.
And Toyota Motor Corp will post its first decline in annual global sales in a decade this year, hit by slowing demand worldwide amid the financial crisis, a Japanese newspaper predicted yesterday.
Japan's largest auto maker will probably sell 8.3 million units in 2008 on the parent level - excluding subsidiaries and affiliates - down from 8.43 million units in 2007, the Nikkei Daily said.
Demand has been weak in the United States, Europe and Japan amid the global financial crisis and worries over an international economic slowdown, the paper said.
The company is due to release annual sales data in January 2009.
The company has been racing neck-and-neck with General Motors Corp to be the world's biggest auto maker by global sales. Last year, Toyota's group sales - including those from minicar maker Daihatsu Motor Co and truck maker Hino Motors Ltd - rose to 9.366 million vehicles, just shy of GM's 9.37 million.