Japan’s five major automakers suffered domestically during the 1997 business year, which ended March 31, but three managed to boost profits on increased sales abroad.
Toyota Motor Corp. and Honda Motor Co. showed their strength despite the dismal economic conditions, posting record-high consolidated sales and profits. Due to changes in its accounting methods, Toyota’s consolidated sales declined while its sales actually grew if calculated under the previous accounting system.
As a result of its restructuring plan and the continued popularity of its Demio sport-utility vehicle, Mazda Motor Corp. also managed to increase sales and profits from the previous year.
In contrast, Mitsubishi Motors Corp. and Nissan Motor Co. reported one of their worst business years ever due to a sharp drop in domestic sales and huge accumulated debts.
Mitsubishi reported consolidated pretax losses Thursday of 54.52 billion yen in the 1997 business year on declining sales at home and Southeast Asia, which was hit hard by the region’s currency turmoil. Mitsubishi’s group sales showed growth of 1.7 percent to 3.74 trillion yen, while operating income declined 93 percent to 3.19 billion yen, the firm said.
As a result, the group posted net losses of 101.84 billion yen. Mitsubishi said the Asian economic crisis caused its subsidiary in Thailand to report losses of 42.6 billion yen in 1997.
“By 2000, we hope to post an appropriate profit by reducing our assets and increasing our sales,” said Minoru Wada, vice president of Mitsubishi Motors.
Nissan, meanwhile, posted consolidated pretax profits of 4.6 billion yen, but reported net losses of 14 billion yen.
Nissan has recently unveiled a comprehensive restructuring plan to return the company’s financial condition to good health.
Through the restructuring plan, which includes sales of real estate and reducing the number of its employees as well as cutting its number of platforms, the nation’s No. 2 auto manufacturer aims to reduce 2.5 trillion yen in consolidated interest-bearing liabilities by 1 trillion yen by the 2000 business year.
All of the automakers’ exports grew due to the booming economy in Europe, Latin America and the United States and the yen’s depreciation against the dollar.
But some analysts warn that even those automakers that enjoyed profit growth should continue their cost-cutting efforts since their profits are largely attributed to the weak yen and strong exports.
Representatives of Japan’s auto industry seem to agree that the nation’s economic slump is likely to continue during the first half of the current business year.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.