Mitsubishi Motors faces financial turmoil as profits plunge and sales targets shrink

Mitsubishi Motors is staring down a challenging financial year, cutting its profit forecast by 76% as global headwinds batter the company. Net profit expectations have plummeted from 144 billion yen to just 35 billion yen ($226 million), a steep drop driven by soaring supplier costs, weak wholesale sales, and mounting marketing expenses in North America.

The automaker has also revised its global sales target to 848,000 vehicles, down from its earlier estimate of 895,000. While this represents modest growth compared to last year’s 815,000 vehicles sold, Mitsubishi’s struggles in key Southeast Asian markets—particularly Thailand and Indonesia—have raised concerns. “Thailand’s post-pandemic recovery has been slower than expected, with vehicle demand declining and exchange rates deteriorating,” CEO Takao Kato explained.

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To counter these challenges, Mitsubishi is implementing cost-saving measures, including offering early retirement packages to 300 employees as part of a regional restructuring. Analysts note the automaker’s difficulties come at a time when the global industry is rapidly shifting toward electrification and AI-driven technologies, leaving legacy players like Mitsubishi vulnerable.

Adding to the uncertainty, Mitsubishi’s future role in the rumored Nissan-Honda merger remains unclear. Historically tied to Nissan through its alliance, Mitsubishi has positioned itself as a specialist in plug-in hybrid technology and pickup trucks within the Asia-Pacific region. However, its smaller scale and limited presence in North America could hinder its ability to remain competitive without a stronger partner.

Despite these struggles, the automaker has found some bright spots. North American sales surged by 26% in 2024, marking Mitsubishi’s best performance in the region since 2019. The company hopes to sustain this momentum with a lineup of new models, including a small crossover-coupe EV slated for release next year.

“The auto industry is consolidating rapidly,” said a Tokyo-based analyst. “Mitsubishi faces a critical choice: align with a larger player or risk being left behind.”