Mitsubishi Motors Slashes Full-Year Forecast After Interim Profit Decline

Mitsubishi Motors significantly lowered its full-year earnings forecast after reporting a sharp decline in interim profits, signaling headwinds from a rapidly accelerating shift to electric vehicles and the impact of geopolitical instability. The company now anticipates a weaker performance than previously projected, citing intensified price competition and disruptions caused by the Middle East conflict.

For the first half of fiscal year 2027, Mitsubishi Motors posted a net loss of ¥3.0 billion, a substantial decrease from the ¥5.2 billion loss reported in the same period last year, but a deterioration from previous guidance. While revenue increased by 4% to ¥1.309 trillion, driven by strong sales in Japan and the Middle East and favorable exchange rate effects, this was not enough to offset the rising costs and softening demand in key markets. The company’s operating profit reached ¥30.6 billion, a ¥13.3 billion increase year-over-year, but this gain has been overshadowed by the revised outlook.

The downward revision stems from a faster-than-anticipated surge in EV adoption, fueled by rising fuel prices linked to the Middle East conflict, and increasing price competition. This has prompted Mitsubishi Motors to revise its global sales forecast down to 764,000 units. The company also settled a prior lawsuit with its North American subsidiary, Mitsubishi Motors North America, Inc. (MMNA), with associated expenses recorded in the current interim results, but without altering the full-year forecast at the time of the interim report.

These results reflect the complex challenges facing Mitsubishi Motors as it navigates the global automotive landscape. While the company is experiencing growth in certain regions, these gains are being offset by headwinds in others. The faster-than-expected EV transition, coupled with geopolitical uncertainties and rising material costs, is creating a challenging environment for the automaker. The reported interim results and revised forecast underscore the need for Mitsubishi Motors to adapt its strategies to capitalize on emerging opportunities in the EV market and mitigate the impact of external factors.