Mitsubishi Motors' FY2024 Results: Navigating Challenges with Resilience and Growth

Mitsubishi Motors Corporation (7211.T) recently unveiled its fiscal year 2024 (FY2024) financial results, offering a glimpse into its performance amid a volatile global automotive market. While the company did not isolate fourth-quarter (Q4) data in its disclosures, the full-year results—announced on May 8, 2025—paint a picture of resilience, strategic cost discipline, and cautious optimism for the future.

Key Financial Highlights

• Net Sales: ¥2,788.2 billion, flat year-on-year, reflecting a challenging sales environment in key markets like Thailand and Indonesia.
• Operating Profit: ¥138.8 billion, with a 5% operating margin, surpassing revised forecasts driven by cost reductions and new model launches.
• Retail Sales Volume: 842,000 units, up 27,000 units from FY2023, though slightly below revised targets due to supply chain and demand headwinds.
• Dividend Policy: A ¥15 per-share annual dividend, a 50% increase from the previous year, signaling improved financial stability.

Drivers of Performance

Mitsubishi’s success hinged on two critical factors: cost management and new product momentum. Despite a 12% drop in operating profit year-on-year, the company slashed fixed costs and leveraged economies of scale from new models like the Outlander PHEV and Eclipse Cross. These efforts offset the negative impact of currency fluctuations, particularly the Thai baht’s appreciation in the second half of FY2024.

The stock’s trajectory reflects this mixed narrative: a dip in early 2025 following macroeconomic concerns stabilized as cost-cutting measures bore fruit, with the stock hovering around ¥280–¥300—a modest rebound from its FY2023 lows.

Challenges and Risks

• Regional Market Struggles: Sales in Thailand and Indonesia lagged due to delayed demand recovery and intensifying competition as global supply constraints eased.
• Currency Headwinds: While favorable FX rates boosted first-half profits, the second half saw a reversal, costing the company significantly.
• Structural Costs: Inflation-driven fixed costs remain a persistent challenge, though Mitsubishi has implemented aggressive cost controls to mitigate these pressures.

Outlook for FY2025

Mitsubishi aims to capitalize on its electric vehicle (EV) pipeline and regional diversification. Key targets include:
- Order Intake: ¥5,800 billion (up from FY2024’s ¥5,500 billion).
- Operating Profit: ¥150 billion, driven by new EV models and cost savings.
- Global Expansion: Strengthening its footprint in Europe and North America, where demand for compact SUVs and hybrids remains robust.

Investment Considerations

• Valuation: At a trailing P/E of ~18x (based on FY2024 net income of ¥41 billion), the stock appears moderately priced compared to peers like Toyota (TM) or Honda (HMC), which trade at ~15x and ~12x, respectively.
• Risks: Geopolitical tensions, raw material costs, and further currency volatility in Southeast Asia could test profitability.
• Catalysts: Strong EV adoption in key markets and successful cost synergies with its alliance partners (Nissan, Renault) could drive upside.

Conclusion

Mitsubishi Motors’ FY2024 results underscore its ability to navigate adversity through disciplined execution and product innovation. While regional and macroeconomic headwinds persist, the company’s focus on cost discipline and EV growth positions it for long-term resilience. Investors should monitor progress on its FY2025 targets and the rollout of its EV lineup, particularly in high-margin markets. With a dividend yield of ~1.7% (post-increase) and a valuation that balances risk and growth, Mitsubishi presents a cautiously bullish opportunity for those willing to bet on its turnaround story.

Final Take: Mitsubishi Motors’ FY2024 results are a testament to its adaptability. With a 50% dividend hike and a strategic pivot toward EVs, the company is laying the groundwork for sustainable growth—if it can weather the storm in its core Asian markets.