Mitsubishi Motors Corp. said Monday its first-half net loss widened to a record 146.2 billion yen.

The scandal-hit automaker, which posted a loss of 80.2 billion yen a year earlier, said it has also downgraded its full-year earnings forecast.

The grim outcome for the April-September period was mainly attributed to one-time losses, including 12.3 billion yen spent on restructuring plants in Japan and Australia and 19.9 billion yen in costs to conduct free inspection programs for Mitsubishi vehicle owners in the wake of a series of defect coverup scandals that broke in March.

Sales fell 11.3 percent to 1.71 trillion yen.

In terms of volume, MMC sold 646,000 vehicles worldwide, down 16.3 percent from the previous year.

Domestic sales fell 44 percent to 96,000 units, apparently due to MMC’s negative brand image.

Its operating loss was 63.5 billion yen, compared with a 76.4 billion yen loss the previous year, mainly helped by cuts in sales promotion expenses, including costs for advertisements in Japan, and sales incentives for dealerships in the United States.

The absence of a one-time loss of 41.7 billion yen the previous year linked to MMC’s financial service business in the U.S. was another factor behind the improvement.

MMC faces a tougher road ahead.

A greater than expected sales decline in Japan and the U.S. has led it to revise downward its earning projection for the full fiscal year. MMC now expects to post a 240 billion yen loss, 10 billion yen more than forecast in May.

MMC President Hideyasu Tagaya told a news conference in Tokyo that domestic sales are showing signs of recovery. He said the figures should further improve with the debut of the Colt Plus in late October. MMC has already received 2,264 orders for the compact wagon, he added.

In June, MMC was forced to lower its domestic sales target under the revival plan announced in May to 220,000 units from 300,000.

In North America, MMC sold 92,000 vehicles in the first half, down 39 percent. MMC revised downward its sales target for fiscal 2004 to 185,000 units from 233,000 units under the revival plan announced in late May.

Thanks to the popularity of the new Colt compact, sales in Europe surged 7.6 percent. Sales in Asia and other areas remained almost flat at 346,000 units.

Tagaya said MMC has cut 8 percent of its 49,000-strong workforce.

Under its revival plan, MMC plans to cut 22 percent of its total workforce by the end of March 2007.

Honda boosts venture

Honda Motor Co. said Monday its joint venture with Dongfeng Motor Corp. of China will expand its annual production capacity from the current 30,000 units to 120,000 units by early 2006.

Dongfeng Honda Automobile (Wuhan) Co. will invest about 36 billion yen to expand its existing factory in Wuhan, Hubei Province, according to Honda.

The joint venture will increase its payroll from 930 workers to 2,800 by 2006 in line with the factory expansion plan, Honda said.

The joint firm began car production in April. It is 40 percent owned by Honda, 10 percent by Honda Motor (China) Investment Co. and the remaining 50 percent by Dongfeng Motor Industry Investment Corp.

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