Mitsubishi Motors, the Japanese company, has lowered its operating profit forecast for the current fiscal year by 30%, in a move that reflects the increasing pressures on the Japanese automotive industry due to US tariffs and a slowdown in sales.
The company stated in a release today, Wednesday, that it expects to record an operating profit of 70 billion yen, equivalent to about 475 million dollars, by the end of the fiscal year in March, which is a significant decline from its previous estimates of 100 billion yen.
Mitsubishi Motors indicated that the negative revision in forecasts resulted from a combination of factors, most notably the rise in US tariffs on car exports, as well as the expected decline in sales volume in several key markets, in addition to the increase in selling and marketing expenses, which has significantly pressured profit margins.
This decline in Mitsubishi's profit forecasts reflects the major challenges facing the Japanese automotive industry, particularly with fierce competition in the global market, ongoing changes in consumption patterns, alongside rising operational costs. Additionally, the pressures arising from trade policies between the United States and Japan have had a direct impact on the company's profitability outlook.
Following the announcement of the new forecasts, Mitsubishi's stock saw a noticeable decline on the Tokyo Stock Exchange, dropping nearly 2% to trade at around 401 yen.
Analysts believe that the stock's negative performance reflects a loss of investor confidence in the short term, with expectations remaining more pessimistic about the company’s ability to improve its financial results under the current conditions.
