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Mitsubishi Motors posts ¥198.52 billion net loss for fiscal 2016, but forecasts recovery under Nissan

Kyodo

Mitsubishi Motors Corp. on Tuesday reported a group net loss of ¥198.52 billion ($1.75 billion) for the business year through March 2017 amid expanding costs related to a fuel economy data manipulation scandal.

The automaker, which became part of Nissan Motor Co. last year, reported a consolidated operating profit of ¥5.12 billion, down 96.3 percent from a year earlier, on sales of ¥1.91 trillion, down 15.9 percent.

The company, however, said it expects to return to profitability in the current business year ending in March 2018 with a group net profit of ¥68 billion, as strong relations with Nissan are likely to help boost its corporate performance.

“Although our 12-month results were marred by the fuel economy scandal in Japan during the first half, we have begun a V-shaped recovery,” Mitsubishi Motors Chief Executive Officer Osamu Masuko said in a statement.

“Following the strategic investment by Nissan last fall, we are now seeing the initial benefits of our partnership and the first synergies from our membership of the wider Renault-Nissan alliance,” he added.

In fiscal 2016, Mitsubishi Motors’ auto retail sales in North America grew 2 percent from the previous year to 138,000 units, but they fell 22 percent to 80,000 units in Japan, 13 percent to 179,000 in Europe and 2 percent to 315,000 in Asia excluding Japan.

It was revealed last spring that Mitsubishi Motors had manipulated data to make some minicar models look more fuel efficient, including models supplied to Nissan. It was later found that improper practices related to fuel economy data were prevalent at the automaker, affecting additional models.

Mitsubishi Motors is now counting on synergy effects following Nissan’s acquisition of a 34 percent stake, a deal aimed at deepening cooperation on autonomous driving and other advanced technologies.

As part of the deal, Mitsubishi Motors will supply auto parts to be produced at its factory in western Japan to Nissan, the country’s second-largest carmaker by volume, a source said Tuesday.

The two companies have agreed to make efforts to cut costs by jointly operating factories and procuring auto parts.