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Mitsubishi reports an 89% drop in annual profit

TOKYO — Mitsubishi will focus on cutting fixed costs by 20% or more in the next two years after reporting an 89% drop in annual profit, its weakest performance in three years, and skipping its year-end dividend. The coronavirus crisis has exacerbated Mitsubishi's struggles in a year where Japan's sixth biggest carmaker was already battling falling sales in China and also southeast Asia, its largest market which accounts for one-quarter of sales. Mitsubishi also said on Tuesday it would focus on growth in ASEAN countries to survive the aftermath of the pandemic. "Before the virus we had been mulling which underperforming regions and vehicle segments to cut our exposure to," CEO Takao Kato told a results teleconference. "In the wake of the virus, we need to pick up the pace of making these changes. To stay competitive in a post-coronavirus market, we need to immediately shrink our area of focus to regions and segments in which we excel." Global automakers are struggling to cope with the crisis, which has pummeled car sales due to lockdowns in many countries. Many automakers have begun to restart vehicle factories, but anemic demand, supply chain disruptions and social distancing measures at factories are expected to limit output. Mitsubishi's operating profit came in at 12.8 billion yen ($119.21 million) for the year to end March, down from 111.8 billion yen a year ago, and its lowest since the year to end March 2017. Profits exceeded a consensus estimate of 9.4 billion yen profit drawn from 15 analysts polled by Refinitiv. The automaker did not give an earnings forecast for the current business year, and did not issue a year-end dividend, compared with 10 yen per share a year ago. The junior member of the automaking partnership between Nissan and France's Renault, sold 1.13 million vehicles globally in the year ended March, down 9%. Mitsubishi will focus on growth in southeast Asia as part of the alliance's plan for each company to expand in their regions of strength. Mitsubishi said it would give more details when it reports first-quarter results. The alliance is expected to announce a revamped strategy on May 27, when it will pledge to increase cooperation to improve joint operations to remain competitive. Related Video:

The Mitsubishi Outlander third row has actually been far worse

It's rare for a compact SUV to have a third row, and there's a good reason for that: Few humans can actually fit in such a tiny space. And sure, there are obviously kids, but they usually require some sort of child seat that's not fitting back there, either.  In other words, the use case is as tiny as the seats themselves. No wonder, then, that there are only two three-row compact SUVs: the 2022 Volkswagen Tiguan and the 2022 Mitsubishi Outlander. While I have yet to witness the Tiguan, the above photo is the result of fitting a 6-foot-3 automotive editor into the Outlander's third row. It ain't pretty. And that's with the middle row pushed all the way forward. Also note that it's just not a matter of legroom — headroom is terrible, too.  Obviously, this is an extreme and ridiculous test. In the end, the need to accommodate the third row almost certainly allows the Outlander to have more cargo space than average (and the mechanically related Nissan Rogue) even if it's presence is also likely the reason it doesn't have as much room as the CR-V, RAV4 and Tucson (more on that coming soon in a luggage test). It's basically a bonus feature, and if you can in fact use it, great! It's also exponentially better than the original Outlander third row. Specifically, the second-generation model that had a shockingly flimsy design that would've been rickety for the 1980s let alone the late 2000s. It consisted of a mesh fabric pulled over a tube steel ring. It was more like a beach chair than something that belonged in a moving vehicle.  Here are two period videos of me demonstrating it in a 2010 Outlander. In the first, I raise the seat, showing how difficult it was to do and how rickety it was once in place. The second video shows the mesh seat bottom.  Video 1: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings. Video 2: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.

Nissan, Renault in talks to merge as one company

Nissan and Renault have been tied together as an alliance for nearly 20 years, but now the Japanese and French automakers are discussing whether to merge. Bloomberg, citing unidentified sources familiar with the confidential talks, reports that the idea is to form a larger, single publicly traded company to better compete against giants like Toyota and Volkswagen. It would also mark the end of the alliance that first began in 1999 and also includes Mitsubishi, in which Nissan acquired a controlling interest in 2016. A full merger would help the companies pool resources to develop electric vehicles, autonomous vehicles and car-sharing services. It would involve Nissan giving Renault shareholders stock in the new company, with Nissan shareholders also gaining shares in the new company, Bloomberg reports. The new company would be run by Carlos Ghosn, the current chairman of both companies. But any such merger, as you might expect, would be complicated, in part by geopolitics. The French government owns a 15-percent stake in Renault, and both the French and Japanese governments might be reluctant to let go of their respective home-grown brands. Currently, Renault owns a 43-percent stake in Nissan, while Nissan owns 15 percent of its French partner. Reuters reported recently that Ghosn proposed buying most of the French government's stake in Renault as part of plans for a closer tie-up. The Renault-Nissan-Mitsubishi alliance already has been working to establish a $200 million mobility tech fund to invest in startups, a reflection of how seismic changes in the auto industry have left many legacy companies scrambling to stay current. Nissan in 2016 paid a reported $2.3 billion to acquire 34 percent of Mitsubishi in order to share platforms, technology, manufacturing and other resources. Related Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings. Image Credit: Patrick T. Fallon/Bloomberg Earnings/Financials Government/Legal Green Mitsubishi Nissan Renault car sharing merger