Mitsubishi Motors Navigates Challenges in FY2024 Amid Global Market Shifts

Mitsubishi Motors Corporation (MMTOF) closed its fiscal year 2024 (April 2024–March 2025) with mixed results, reflecting both the resilience of its new product launches and the persistent headwinds of a fiercely competitive global automotive market. While the company posted a modest increase in sales volume and maintained a focus on electrification, profitability suffered significantly due to cost pressures, currency fluctuations, and uneven regional demand.

Financial Performance: Profitability Under Pressure

Mitsubishi’s FY2024 financials highlighted a stark trade-off between volume growth and margin contraction. Total revenue reached ¥2,788.2 billion, virtually flat year-over-year, while operating profit plunged 27% to ¥138.8 billion, and net income collapsed 74% to ¥41.0 billion. The profit margin narrowed to a mere 1.5%, down from 5.5% in FY2023, underscoring the strain of rising costs and competitive pricing in key markets like the U.S. and Thailand.

The company’s EPS fell to ¥28.70, missing analyst expectations by 32%, even as revenue narrowly beat forecasts. Analysts attributed the weak bottom-line results to increased sales incentives, inflation-driven costs, and the appreciation of the Thai baht, which eroded margins in the latter half of the fiscal year.

Regional Performance: Growth in Core Markets, Struggles in ASEAN

Despite challenges, Mitsubishi’s sales volume grew 3.3% year-over-year to 842,000 units, driven by strong performances in its core markets:

• Japan: Domestic sales surged 6.9% to 117,486 units, fueled by new model launches like the upgraded Outlander PHEV and the compact Delica Mini. This marked the third consecutive year of growth in Japan.
• North America: Exports to the region rose 1% to 116,048 units, with the Outlander PHEV setting a record in March 2025 for its best-ever dealer-retail month. Mitsubishi also expanded its U.S. dealership network through partnerships with major groups like LaFontaine Automotive, supporting its "Momentum 2030" plan to double its U.S. product lineup by 2030.

However, the company faced setbacks in Thailand and Indonesia, where production fell 27% and rose 103%, respectively, due to delayed demand recovery and supply chain bottlenecks. ASEAN exports dropped 1.7%, while European exports fell 44%, reflecting stagnant economic conditions and geopolitical disruptions.

Strategic Initiatives: Electrification and Cost Control

Mitsubishi emphasized its electrification roadmap, aiming for 100% sales of electrified vehicles by 2035. The Outlander PHEV, a cornerstone of its strategy, contributed significantly to North American sales growth, with March 2025 marking its highest monthly sales ever in that region. The company also launched the XForce and Triton pickup trucks in ASEAN markets, which helped stabilize market share despite sluggish demand.

On the cost front, Mitsubishi improved procurement efficiency by ¥10.4 billion and reduced material costs, partially offsetting inflationary pressures. However, rising R&D expenses (+¥8.5 billion) and quality-control costs continued to weigh on margins.

Challenges Ahead: Currency Risks and Market Volatility

The Thai baht’s appreciation in the second half of FY2024 cut into profits, a recurring issue for Mitsubishi, which relies heavily on Thai manufacturing. Meanwhile, global competition intensified as rivals like Toyota and Honda leveraged economies of scale to undercut pricing. In ASEAN, Mitsubishi’s struggles in Thailand contrasted with gains in Indonesia, where production expanded but demand remained volatile.

The company also faces structural challenges, including declining domestic production in Japan (-4.2%) and a 10% drop in total global production, signaling a need to optimize capacity utilization.

Conclusion: A Fragile Path to Recovery

Mitsubishi Motors’ FY2024 results paint a picture of a company navigating a tightrope between innovation and cost discipline. While its electrification strategy and new models like the Outlander PHEV offer growth potential, profitability remains vulnerable to external factors like currency swings and regional demand fluctuations.

Investors should take note of the ¥15 per-share dividend increase, a positive signal of cash flow stability, but remain cautious about the 74% net income decline and margin compression. Mitsubishi’s ability to sustain momentum in North America and Japan—while reviving ASEAN demand—will be critical.

The road ahead hinges on execution: Can Mitsubishi control costs without sacrificing market share? Can its electrification pivot offset margin pressures? With ¥2,788.2 billion in revenue and a renewed focus on partnerships and innovation, the company has the tools to stabilize—but the automotive market leaves little room for error.

For now, Mitsubishi’s story is one of resilience amid turbulence—a tale of hope in new models and lingering doubts about profitability. Investors may want to watch closely as the company seeks to turn the tide in FY2025.