Mitsubishi, Mazda See Red in First Half

Japanese automakers hard hit by plunge in worldwide car sales and strength of the yen.

Japanese automakers Mitsubishi and Mazda said Thursday they were mired in the red in the six months to September, warning that the global car industry remains in a severe situation.

Mitsubishi Motors Corp. posted a first-half net loss of 36.40 billion yen (US$402 million), swinging into the red after a year-earlier profit of 12.77 billion yen.

Revenue more than halved to 573.03 billion yen from 1.21 trillion yen, leaving the group with an operating loss of 32.50 billion yen, compared with a profit of 25.36 billion yen in the same period of 2008.

"The current economic situation is extremely severe," Mitsubishi's president Osamu Masuko told reporters, noting that the positive impact of government incentives for people to buy environmentally friendly cars was set to fade.

Mitsubishi Motors' global sales tumbled 26% to about 445,000 vehicles in April-September due to weaker demand in key markets such as North America, Europe and Japan, which offset improvements in China and the Philippines.

As well as a worldwide plunge in car sales, the strength of the yen is another major headache for Japanese manufacturers, which are increasingly relying on overseas buyers to compensate for a weak domestic market.

"There are some countries where their economies are getting better," Masuko said, referring to China and some other East Asian nations. "We'd like to grow in these regions."

The company is also seeking to capture a slice of the fast-growing market for environmentally friendly cars and earlier this year rolled out the electric "i-MiEV" minicar.

The maker of the Pajero and Outlander sport-utility vehicles kept its annual forecast unchanged, predicting a net profit of five billion yen and operating profit of 30 billion yen.

Mazda Motor Corp., which vies with Mitsubishi for the rank of Japan's No. 4 automaker, booked a net loss of 20.81 billion yen in the six months to September, against a year-earlier profit of 29.5 billion yen.

But the company, which is partly owned by U.S. auto giant Ford, posted a net profit of 707 million yen for the fiscal second quarter alone, down from 14.5 billion yen a year earlier.

Mazda sold 577,000 vehicles worldwide in the first-half period, down 18% year-on-year.

For the full financial year to March 2010 it expects a net loss of 17 billion yen. "Demand for cars will be subdued in the second half of the year and could be worse next year," Mazda's president Takashi Yamanouchi said.

Copyright Agence France-Presse, 2009

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