Mitsubishi Motors hits all-time low as ASEAN sales dive raise recovery doubts

TOKYO: Japan’s Mitsubishi Motors faced doubts about a quick recovery after posting dismal quarterly sales in its key Southeast Asia market partly due to the coronavirus outbreak, sending its shares down 12% to a record low on Tuesday.

A day earlier, Mitsubishi Motors, a junior member of the auto alliance of Nissan Motor and Renault SA, reported that sales in Southeast Asian countries, which normally account for a quarter of its global sales, plunged nearly 70% to make up just 17% of total sales during April-June.

The automaker has bet on growth in Indonesia, Philippines, Thailand and Vietnam where it has dominated bigger rivals, and which have felt the brunt of the coronavirus pandemic later than China and other developed countries.

As a result, some experts say that Mitsubishi’s sales recovery may lag other automakers and complicate a restructuring plan that it detailed on Monday.

The automaker also projected an operating loss of 140 billion yen ($1.33 billion) for the year ending on March 31, 2021, its biggest loss in at least 18 years.

Mitsubishi Motors’ results were “shocking”, said analyst Mio Kato of LightStream Research, noting that Southeast Asia was particularly concerning.

“ASEAN was meant to be its growth driver and was even positioned as its key attractive point to the Renault-Nissan Alliance. ASEAN sales have collapsed and it is now generating losses,” Kato said in a note to clients, referring to Southeast Asia.

Globally it sold just 139,000 vehicles in the April-June quarter, a 53% tumble from a year ago.

Mitsubishi’s shares fell 12% to 236 yen on Tuesday, marking a lifetime low since their 1988 listing. The shares have nearly halved this year.

Some analysts were sanguine about the company’s longer term outlook and backed its recovery strategy.

“In the short term Southeast Asia is not going to work that well for them, but in the longer term it’s the right thing for them to do,” said Chris Richter, deputy head of Japan research at CLSA.