On the Dash:
- Mitsubishi Motors cut its profit forecast by 30% for the fiscal year ending March 2026, lowering its projection to 70 billion yen ($475 million) due to U.S. tariffs, weaker sales, and rising costs.
- Global competition and price pressures are eroding margins, as rivals increase discounts in markets like Vietnam, Australia, Indonesia, and Germany, forcing Mitsubishi to spend more on sales incentives.
- The revised outlook assumes a new 15% U.S. tariff rate will take effect in October, further intensifying profitability challenges for the automaker.
Mitsubishi Motors has cut its operating profit forecast for the current fiscal year by 30%, citing U.S. import tariffs, weaker sales expectations, and rising costs. The automaker now projects a profit of 70 billion yen ($475 million) through March 2026, down from its previous estimate of 100 billion yen.
The announcement sent Mitsubishi shares down 2% on Wednesday, closing at 401.5 yen.
Chief Executive Officer Takao Kato stated that the revised outlook reflects the difficulties in raising vehicle prices and reducing incentives to offset tariff expenses. He noted that intensified competition outside the U.S. has further pressured profitability as automakers worldwide adjust to tariff-related disruptions.
Executive Vice President Tatsuo Nakamura added that rivals have increased discounts in key markets, such as Vietnam and Australia, to mitigate the impact of U.S. losses, with similar challenges emerging in Indonesia and Germany. These price moves have increased selling expenses and reduced margins across multiple regions.
The company’s new forecast assumes the 15% tariff rate negotiated between Tokyo and Washington last month will take effect in October. Mitsubishi, like other Japanese automakers, faces mounting pressure to balance global pricing strategies while navigating higher trade costs.
