AutoBeta(AutoBeta.net)04/26 Report--

Mitsubishi Motors cut its performance target for fiscal year 2019 (April 2019-March 2020) and cut the remuneration of its top executives by nearly half in response to the decline in sales caused by the COVID-19 epidemic, according to foreign media reports. In addition, the annual report for fiscal year 2019, originally scheduled for release on May 13, has also been postponed to May 19.

Mitsubishi Motors cut its forecast sales for fiscal year 2019 by 7.3 per cent to 2.27 trillion yen from 2.45 trillion yen, down 9.7 per cent from 2018, while forecast operating profit fell 60 per cent to 12 billion yen from 30 billion yen, down 89.3 per cent from 2018. Mitsubishi Motors also warned that it expects a net loss of 26 billion yen ($241.2 million) for the 2019 fiscal year, which ends on March 31.

In addition, Mitsubishi Motors also decided to reduce the pay of its executive team and company directors in fiscal year 2020, which begins on April 1. Among them, the base salary of chief executives, executives and company executives was reduced by 20% and 30%, and the performance pay for the fiscal year was abolished. In the past month, many car companies have announced plans to cut wages due to the impact of the epidemic.

The decline in demand in the global automobile market and the spread of novel coronavirus are the main reasons why Mitsubishi Motors slashed its performance forecast for the fiscal year. Mitsubishi Motors has stopped production at its factories in Japan since the outbreak in March, and Mitsubishi chief executive Takao Kato said it was difficult for the company to provide appropriate performance forecasts in an uncertain business environment. What is important now is to establish financial stability and prepare for all possible downside risks.

On the whole, Mitsubishi Motors is not very optimistic either in its home market or in overseas markets. As far as the Chinese market is concerned, Mitsubishi's production and sales in the Chinese market have gradually returned to the pre-epidemic level, but its development in China is still fraught with difficulties. Data show that GAC-Mitsubishi accumulated sales of 144000 vehicles in 2018, an increase of 22.7% over the same period last year. As the cold winter of the car market continues, GAC-Mitsubishi has turned into a decline. GAC-Mitsubishi sold 133000 vehicles in 2019, down 8 per cent from a year earlier. The decline widened in 2020, with GAC-Mitsubishi's cumulative sales of only 10672 vehicles in the first quarter, down 66.66% from the same period last year, making it the brand under GAC GROUP with the largest decline.

The unpopular market performance of GAC-Mitsubishi is related to the slow progress of product renewal and the inactive introduction of technology. Not long ago, GAC-Mitsubishi filed a recall plan with the State Administration of Market Supervision and Administration, and decided to recall a total of 174500 Yige, Outlander, Jinxuan ASX and so on. It is understood that GAC-Mitsubishi has recalled nearly 40 times since 2015, involving transmissions, engines, doors, brakes and wipers and other issues.

Against a backdrop of declining sales, recalls caused by quality problems have made Mitsubishi Motors worse. For Mitsubishi Motors, the top priority is to speed up the updating of its products. According to GAC-Mitsubishi official news, the 2020 Outlander will go on sale on May 6, continuing the design of the cash model as a whole. In terms of power, the 2020 Outlander continues to carry 2.0L and 2.4L naturally aspirated engines.

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