Annual Report 2007(2.3MB)

MITSUBISHI MOTORS CORPORATION Annual Report 2007 Year ended March 31, 2007 Mitsubishi Group Philosophy—Three Corporate Principles Corporate Responsibility to Integrity and Fairness International Understand- Society “Shoki Hoko” “Shoji Komei” ing through Trade Strive to enrich society, both Maintain principles of transparency “Ritsugyo Boeki” materially and spiritually, while and openness, conducting business Expand business, based on an all- contributing towards the preserva- with integrity and fairness. encompassing global perspective. tion of the global environment. Contents Mitsubishi Motors Corporate Philosophy _____________________ 1 Consolidated Financial Summary ___________________________ 2 Progress in the Mitsubishi Motors Revitalization Plan _________ 3 To Our Shareholders and Stakeholders ______________________ 4 Interview With President Osamu Masuko ____________________ 6 Progress in the First Two Years of On the Cover the Mitsubishi Motors Revitalization Plan _________________ 14 Launched first in the North American market in March 2007, the new Lancer is Product Development ____________________________________ 16 based on the product concept of creating a Technology Development _________________________________ 18 global sporty sedan that delivers high and well-balanced levels of safety, comfort and Regional Topics Japan___________________________________ 20 environmental performance. In August, this North America ___________________________ 22 model made its debut in Japan as the Galant Fortis, and has been followed by succes- Europe__________________________________ 24 sive roll-outs worldwide. Asia, ASEAN and Other Regions ____________ 26 The new Lancer offers quality handling and response, as well as the kind of driving Quality ________________________________________________ 30 experience that defines the Mitsubishi Motors brand. Its balanced, sophisticated and sharp design immediately identifies it Corporate Governance ___________________________________ 32 as a Mitsubishi Motors sedan and expresses a feeling of purposefulness and stability. Compliance ____________________________________________ 35 Report by Business Ethics Committee _____________________ 36 Forward-looking Statements Environmental Activities _________________________________ 38 This annual report contains forward-looking Motor Sports ___________________________________________ 40 statements about Mitsubishi Motors Corporation’s plans, strategies, beliefs and Organization Structure ___________________________________ 41 performance. These forward-looking state- Executives _____________________________________________ 42 ments are based on current expectations, estimates, forecasts and projections about the industries in which Mitsubishi Motors Financial Section _______________________________________ 43 Corporation (MMC) operates, as well as management’s beliefs and assumptions. Consolidated Subsidiaries and Affiliates ____________________ 84 These expectations, estimates, forecasts and Investor Information _____________________________________ 86 projections are subject to a number of risks and uncertainties that may cause actual re- sults to differ materially from those projected. Mitsubishi Motors Corporation, therefore, cautions readers not to place undue reliance on forward-looking statements. Furthermore, Mitsubishi Motors Corporation undertakes no obligation to update any forward-looking statements as a result of new information, future events or other developments. 04 Mitsubishi Motors Corporate Philosophy 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. 1 MITSUBISHI MOTORS CORPORATION Annual Report 2007 Consolidated Financial Summary For the years ended March 31, In thousands of In millions of yen U.S. dollars FY2002 FY2003 FY2004 FY2005 FY2006 FY2006 For the year: Net sales ¥3,884,874 ¥2,519,449 ¥2,122,626 ¥2,120,068 ¥2,202,869 $18,660,475 Operating income (loss) 82,761 (96,852) (128,544) 6,783 40,237 340,849 Income (loss) before income taxes and minority interest 42,206 (77,173) (460,906) (82,745) 23,104 195,714 Net income (loss) 37,361 (215,424) (474,785) (92,166) 8,745 74,081 In yen In U.S. dollars Per share data: Net income (loss) per share: Basic ¥25.35 ¥(145.22) ¥(194.36) ¥(19.75) ¥1.59 $0.01 Diluted 23.43 – – – 0.96 0.01 Cash dividends – – – – – – In thousands of In millions of yen U.S. dollars At year-end: Total assets ¥2,425,352 ¥2,029,035 ¥1,589,286 ¥1,557,570 ¥1,778,693 $15,067,288 Total net assets 280,294 29,972 324,782 268,678 308,304 2,611,640 Notes: 1. U.S. dollar amounts in the accompanying consolidated financial statements are converted, solely for convenience, at a rate of ¥118.05=U.S.$1.00, the exchange rate prevailing on March 31, 2007. 2. In fiscal year 2002, 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. 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 60 0 3,000 30 -100 0 2,000 -30 -200 -60 -300 1,000 -90 -400 -120 0 -150 -500 02 03 04 05 06 07 (FY)02 03 04 05 06 07 (FY)02 03 04 05 06 07 (FY) Actual Plan Actual Plan Actual Plan 2 Consolidated Financial Summary / Progress in the Mitsubishi Motors Revitalization Plan Progress in the Mitsubishi Motors Revitalization Plan Thousand units FY2005 (Actual) FY2006 (Actual) FY2007 (Target)*1 Retail Sales 1,344 1,230 1,323 Japan 257 247 250 North America 156 164 176 Europe 267 282 316 Asia and Other Regions 664 537 581 In billions of yen Performance Net sales ¥2,120.1 ¥2,202.9 ¥2,430.0 Japan 504.1 506.0 580.0 North America 415.7 423.6 440.0 Europe 586.2 662.8 730.0 Asia and Other Regions 614.1 610.5 680.0 Operating income (loss) 6.8 40.2 51.0 Japan (55.3) (43.8) (20.0) North America (7.2) 0.6 (14.0) Europe 24.4 42.6 43.0 Asia and Other Regions 44.9 40.8 42.0 Net income (loss) (92.2) 8.7 20.0 Balance Sheet Cash and bank deposits 259.0 358.1 – Total assets 1,557.6 1,778.7 – Interest-bearing debt 447.8 503.8 – Total net assets*2 281.3 308.3 – Cash Flow (46.8) 116.4 Cash flow from operating activities 54.4 162.3 – Cash flow from investing activities (84.8) (46.0) – Cash flow from financing activities (19.0) (11.3) – Effect of exchange rate changes on cash and cash equivalents 2.6 11.3 – *1 Fiscal year 2007 targets as per April 26, 2007 announcement. *2 Following revision of the Corporate Law in Japan, effective from fiscal year 2006 the “Stockholders’ Equity” section of the balance sheet has been replaced with “Net Assets” to more appropriately reflect a company’s financial position, including its ability to satisfy its financial obligations. Under this revision, “Assets” and “Liabilities” on the balance sheet represent accounts with the characteristics of either assets or liabilities, respectively, while “Net Assets” represents all other items, i.e. the difference between the two. Figures as of March 31, 2006 have been adjusted to conform with the “Net Assets” presentation of the balance sheet. Total Assets Retail Sales (¥ billion) (Thousand units) 2,500 2,000 2,000 1,500 1,500 1,000 1,000 a OEM 500 (Nissan Motor Co., Ltd., 500 PSA Peugeot Citroën) a Asia and Other Regions 0 0 a Europe 02 03 04 05 06 (FY)02 03 04 05 06 07 (FY) a North America Actual Actual Plan a Japan 3 MITSUBISHI MOTORS CORPORATION Annual Report 2007 To Our Shareholders and Stakeholders Under the three-year Mitsubishi Motors Revitalization Plan unveiled on January 28, 2005 and covering fiscal years 2005 to 2007, all corporate officers and employees of the MMC group have been working as one to regain customer trust and improve earnings. We are delighted to report that MMC achieved its goal of restoring net profitability in fiscal year 2006, the plan’s second year. Measures such as launching new models, strength- ening sales capabilities, enhancing productivity, and cutting costs across the Company have been behind this improvement. In these and other ways, we are seeing MMC’s revitalization gain stronger momentum by the day. Takashi Nishioka Osamu Masuko Chairman of the Board President 4 To Our Shareholders and Stakeholders The main points of MMC’s performance in fiscal launch of the Galant Fortis (Lancer in overseas mar- year 2006 were as follows: kets), our first new sedan in seven years in Japan. Starting with the all-new Lancer Evolution high- 1.

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