Mitsubishi Motors has adjusted its global sales target and net profit forecast for the financial year ending in March, citing sluggish sales and increased costs. The company announced the revised figures on Monday in Tokyo, revealing a 5% reduction in its global sales target to 848,000 units from the previous goal of 895,000 units. This adjustment reflects a significant underperformance in wholesale sales, particularly in competitive markets such as North America.
The automaker also lowered its annual net profit forecast to 35 billion yen, approximately $225 million, marking a sharp 76% decrease from its initial projection of 144 billion yen made in May 2023. The newly adjusted profit forecast underscores the financial challenges Mitsubishi Motors faces as it navigates through higher-than-expected marketing expenses and inflation-related costs.
Mitsubishi's decision to revise its sales and profit targets stems partly from escalating marketing expenses in fiercely competitive regions like North America. The company has had to increase its expenditure to maintain market presence and consumer interest. Additionally, the firm incurred substantial costs to support suppliers grappling with inflationary pressures, further straining its financial performance.
The company's fiscal adjustments reflect broader economic challenges that have impacted the automotive industry worldwide. Rising costs across various sectors have forced many manufacturers to re-evaluate their financial projections. Mitsubishi's experience highlights the precarious balance between maintaining competitiveness and managing rising operational expenses.
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