Mitsubishi expects regional operating profit in North America to more than triple in the current fiscal year ending March 31, 2024 thanks to a combination of factors.
The Japanese car manufacturer expects North America to become its top profit center and second-biggest market after Japan. This is in part due to online sales that have helped it reach new regional North American markets where it has limited dealership penetration as well as positive foreign exchange rates, and strong demand for the Outlander.
While speaking during its latest financial results, Mitsubishi said the positive reaction to the launch of the second-generation Outlander has allowed it to cut U.S. incentives by more than half from historical levels. Additionally, the launch of the Xpander in Mexico is also helping the company’s North American sales, Auto News reports.
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“In North America, despite tight supply caused by semiconductor chip shortages, we introduced the new Outlander in 2021,” Mitsubishi chief financial officer Koji Ikeda said. “Thanks to its product appeal, we have curbed incentive spending and employed digital marketing to make sales more efficient. As a result, our overall sales quality and sales power have improved significantly.”
Mitsubishi needs strong demand in North America as company sales have declined in many major markets. Indeed, sales in China fell by 50% in the first three months of this year, prompting the brand to halt local production until at least the end of May. For the full fiscal year, sales dropped 41% in China to 48,000 units and 49% in Europe to 61,000 units. North American sales also declined by 15% to 133,000 vehicles.
Despite these troubling figures, Mitsubishi says sales in North America should jump by 21% to 161,000 this fiscal year. It also believes that sales across Europe could rise by 33% to 81,000 units. It asserts that global sales should rise by 10% to 917,000 vehicles.
While the outlook for the Chinese market isn’t particularly positive, the company has denied reports that it is thinking of exiting the market entirely.
“No decisions have been made about leaving the market but it has become clear we need a plan to overcome difficulties in China,” chief executive Takao Kato told Bloomberg.
