Annual Report 2006(1.9MB)

MITSUBISHI MOTORS CORPORATION Annual Report 2006 Year ended March 31, 2006 Mitsubishi Group Philosophy—Three Corporate Principles Corporate Responsibility to Integrity and Fairness International Understanding Society “Shoki Hoko” “Shoji Komei” through Trade “Ritsugyo Boeki” Strive to enrich society, both materially Maintain principles of transparency and Expand business, based on an all- and spiritually, while contributing towards openness, conducting business with encompassing global perspective. the preservation of the global environment. integrity and fairness. Contents a Mitsubishi Motors Corporate Philosophy 1 a Quality 34 a Consolidated Financial Summary 2 a Production 36 a Progress in the Mitsubishi Motors Revitalization Plan 3 a Procurement 38 a To Our Shareholders and Stakeholders 4 a Corporate Governance 39 a Top Management Interview 1: a Compliance 42 Progress in the Revitalization Plan and a Organizational Structure 44 Restoring Trust 6 a Executives 45 a Product Development 12 a Environmental Activities 46 Motor Sports 13 a Financial Section 48 A Passion for Developing New Vehicles 14 a Consolidated Subsidiaries and Affiliates 86 Basic R&D Policies 16 a Investor Information 88 Eco-friendly Product Development 17 a Top Management Interview 2: Roadmap for Improving Sales 18 a Regional Topics Japan 24 North America 26 Europe 28 Asia, ASEAN and Other Regions 30 Forward-looking Statements On the Cover This annual report contains forward-looking statements about Mitsubishi Motors Corporation’s plans, strategies, beliefs and perfor- Pajero (Montero) debuted in 1982 as an all-round SUV combining off-road mance. These forward-looking statements are based on current ex- driving performance with the speed and comfort of a passenger vehicle. pectations, estimates, forecasts and projections about the industries Subsequent refinements led to second and third-generation models in 1991 in which Mitsubishi Motors Corporation (MMC) operates, as well as and 1999. Over these years, Pajero (Montero) has been well received by management’s beliefs and assumptions. These expectations, estimates, customers in more than 170 countries and regions around the world, with forecasts and projections are subject to a number of risks, and uncer- roughly 2.5 million units produced and sold on a cumulative basis. tainties that may cause actual results to differ materially from those The new fourth-generation Pajero (Montero) features a diverse array of cut- ting-edge technologies befitting an all-round SUV built to global performance projected. Mitsubishi Motors Corporation, therefore, cautions readers standards. It employs technologies and expertise cultivated through participa- not to place undue reliance on forward-looking statements. Furthermore, tion in the Dakar Rally for the past 23 years and has undergone numerous Mitsubishi Motors Corporation undertakes no obligation to update any tests simulating some of the world’s most exacting driving conditions. forward-looking statements as a result of new information, future events or other developments. 4 MITSUBISHI MOTORS CORPORATION ANNUAL REPORT 2006 Mitsubishi Motors Corporate Philosophy “We are committed to providing the utmost driving pleasure and safety for our valued customers and our community. On these commitments we will never compromise. This is the Mitsubishi Motors way.” Customer-centric approach Mitsubishi Motors will give the highest priority to earning the satisfaction of its customers, and by doing so, become a company that enjoys the trust and confidence of the community at large. To this end, Mitsubishi Motors will strive its utmost to tackle environmental issues, to raise the level of passenger and road safety and to address other issues of concern to car owners and the general public. A clear direction for the development and manufacturing of Mitsubishi Motors vehicles Mitsubishi Motors will manufacture cars that deliver superior driving performance and superior levels of safety and durability to give peace of mind to those who use them, and to provide “utmost driving pleasure” and “reassuring safety” to customers. Going the extra mile Mitsubishi Motors will pay close attention to even the smallest details in the belief that this approach will lead customers to discover new value in their cars, giving them a richer and more rewarding driving experience. Importance of continuity Mitsubishi Motors will continue to manufacture distinctive cars with the passion and conviction to overcome all challenges. MITSUBISHI MOTORS CORPORATION ANNUAL REPORT 2006 1 Consolidated Financial Summary For the years ended March 31, In thousands of In millions of yen U.S. dollars FY2001 FY2002 FY2003 FY2004 FY2005 FY2005 For the year: Net sales ¥3,200,699 ¥3,884,874 ¥2,519,449 ¥2,122,626 ¥2,120,068 $18,047,741 Operating income (loss) 40,227 82,761 (96,852) (128,544) 6,783 57,748 Income (loss) before income taxes and minority interest (31,875) 42,206 (77,173) (460,906) (82,745) (704,400) Net income (loss) 11,256 37,361 (215,424) (474,785) (92,166) (784,596) In yen In U.S. dollars Per share data: Net income (loss) per share: Basic ¥7.66 ¥25.35 ¥(145.22) ¥(194.36) ¥(19.75) $(0.17) Diluted 7.42 23.43 – – – – Cash dividends – – – – – – In thousands of In millions of yen U.S. dollars At year-end: Total assets ¥2,894,560 ¥2,425,352 ¥2,029,035 ¥1,589,286 ¥1,557,570 $13,259,301 Total stockholders’ equity 270,663 280,294 29,972 324,782 268,678 2,287,211 Notes: 1. U.S. dollar amounts in the accompanying consolidated financial statements are converted, solely for convenience, at a rate of ¥117.47=U.S.$1.00, the exchange rate prevailing on March 31, 2006. 2. In the year 2003, due to a change of accounting period at consolidated overseas subsidiaries, with fiscal year-end date moving from December 31 to March 31, 15-month figures for overseas subsidiaries have been incorporated. Prior to fiscal year 2001, the accounting periods of subsidiaries in Japan ran from April to March of the subsequent year, whereas those of overseas subsidiaries ran from January to December with certain exceptions. 3. The assets and liabilities of truck and bus operations are not reflected in each account because these operations were spun off and subsequently became an equity-method affiliate of MMC on March 14, 2003. Furthermore, all remaining shares held by MMC had been transferred to other parties by the end of March 2005. Net Sales Operating Income (Loss) Net Income (Loss) (¥ billion) (¥ billion) (¥ billion) 4,000 90 100 3,500 60 0 3,000 30 -100 2,500 0 2,000 -30 -200 1,500 -60 -300 1,000 -90 -400 500 -120 0 -150 -500 01 0203 04 05 06 (FY) 01 0203 04 05 06 (FY)01 0203 04 05 06 (FY) Actual Plan Actual Plan Actual Plan 2 MITSUBISHI MOTORS CORPORATION ANNUAL REPORT 2006 Consolidated Financial Summary Progress in the Mitsubishi Motors Revitalization Plan Progress in the Mitsubishi Motors Revitalization Plan Thousand units FY2005 (Target) FY2005 (Actual) FY2006 (Target) Retail Sales*1 1,370 1,344 1,408 Japan 256 257 302 North America 169 156 181 Europe 254 267 271 Asia and Other Regions 691 664 654 In billions of yen Performance*1 Net sales ¥2,220.0 ¥2,120.1 ¥2,230.0 Japan 530.0 504.1 570.0 North America 430.0 415.7 450.0 Europe 620.0 586.2 600.0 Asia and Other Regions 640.0 614.1 610.0 Operating income (loss) (14.0) 6.8 43.0 Japan (62.0) (55.3) (24.0) North America (22.0) (7.2) (11.0) Europe 10.0 24.4 26.0 Asia and Other Regions 60.0 44.9 52.0 Net income (loss) (64.0) (92.2) 8.0 Balance Sheet*2 Cash and cash equivalents 175.0 259.0 168.0 Total assets 1,592.0 1,557.6 1,601.0 Interest-bearing debt 497.0 447.8 500.0 Total stockholders’ equity 281.0 268.7 289.0 Cash Flow*2 Cash flow from operating activities 1.0 54.4 105.0 Cash flow from investing activities (122.0) (84.8) (115.0) Cash flow from financing activities 48.0 (19.0) 3.0 Effect of exchange rate changes on cash and cash equivalents – 2.6 – Total (73.0) (46.8) (7.0) *1 MMC revised its targets for fiscal year 2005 and fiscal year 2006 on November 10, 2005 and April 27, 2006, respectively. *2 Targets for fiscal year 2005 and fiscal year 2006 are from figures in the Mitsubishi Motors Revitalization Plan announced on January 28, 2005. Total Assets Retail Sales (¥ billion) (Thousand units) 3,000 2,000 2,500 1,500 2,000 1,500 1,000 a OEM Plan 1,000 (Nissan Motor Co., Ltd., 500 PSA Peugeot Citroën) 500 a Asia and Other Regions a Europe a 0 0 North America 01 0203 04 05 06 (FY)01 0203 04 05 06 (FY) a Japan Actual Plan Actual Plan MITSUBISHI MOTORS CORPORATION ANNUAL REPORT 2006 3 To Our Shareholders and Stakeholders Takashi Nishioka Osamu Masuko Chairman of the Board President On March 31, 2006, Mitsubishi Motors Corporation (MMC) completed the first fiscal year of the three-year Mitsubishi Motors Revitalization Plan, which was unveiled on January 28, 2005 and covers fiscal years 2005 to 2007. Progress was made in the two primary themes of the plan, to win back customer confidence and improve earnings. All corporate officers and employees united to execute each and every initiative of the plan. We’re pleased to report that sales volumes and net sales were largely in line with forecasts for fiscal year 2005 and operating profitability moved back into the black one year earlier than planned. We want to thank our shareholders and stakeholders for their support and guidance in the wake of MMC’s management crisis of 2004.

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