I think they must have shot their wad on the techno. music licensing in their Mirage commercials. *ugh*

Mitsubishi Motors Reports 1st-Half Loss
YURI KAGEYAMA
Associated Press

TOKYO - Mitsubishi Motors Corp. reported a loss for its fiscal first half amid rising auto loan problems and weak sales in North America. The Japanese automaker said the North American problems could delay its planned turnaround now in its third year.

But chief executive Rolf Eckrodt said Tuesday results will improve in the second half because the losses were largely caused by a one-time charge for buyers with bad credit in North America.

"You can call the U.S. a big accident," he told reporters at headquarters in Tokyo. "We are still on the right track."

For the six months ended Sept. 30, Mitsubishi Motors reported Tuesday it lost 80.2 billion yen ($737 million) in contrast to a profit of 6.64 billion yen a year ago. <ed: OUCH!>

Sales slipped to 1.21 trillion yen ($11 billion) from 1.28 trillion yen a year earlier.

Mitsubishi Motors forecast a loss of 11 billion yen ($101 million) for the fiscal year ending March 31, 2004, on sales of 2.6 trillion yen ($24 billion).

As part of its revival in partnership with Germany's DaimlerChrysler AG, which owns 37 percent of Mitsubishi Motors, the automaker has cut costs, collaborated in developing cars and boosted profits in the last two fiscal years, the first two years of the planned turnaround.

Eckrodt acknowledged the unexpected problems in North America would mean a delay in the turnaround. The high cost of U.S. incentives, which are discounts dealers offer on cars, also hurt first half results although Mitsubishi's incentives are lower than those from American automakers.

Car sales dropped in North America by 15 percent to 150,000 vehicles, while sales improved in other regions such as Europe and Asia, especially China, Eckrodt said. Mitsubishi Motors has suspended the planned expansion of its U.S. manufacturing facility in Normal, Illinois.

Worldwide, Mitsubishi Motors sold 773,000 vehicles during the April-September period, up 10,000 from the same period a year ago. In Japan, 171,000 vehicles were sold, up 8,000 from a year earlier. In Europe, sales totaled 104,000 vehicles, up from 101,000, on the success of the Outlander sport utility vehicle and Lancer sedan.

It is forecasting 1.58 million vehicle sales for the full fiscal year, up 2.4 percent from fiscal 2002.

Mitsubishi Motors has struggled to regain its image in Japan after a defect cover-up scandal three years ago that ended up in millions of cars being recalled.

Also damaging its image is a police investigation into a 2002 accident in which a tire fell off a Mitsubishi truck in Japan and crushed a pedestrian. Police raided the Mitsubishi Motors office and other company facilities last month. The company has denied any error in the production and design of the vehicles, which were sold only in Japan.

Mitsubishi Motors has yet to replace chairman Takashi Sonobe, died last month. Sonobe took the job after his predecessor resigned in disgrace over the recall scandal. Eckrodt said Tuesday he cannot comment on a successor until after Sonobe's funeral later this month.

But chief executive Rolf Eckrodt said Tuesday results will improve in the second half because the losses were largely caused by a one-time charge for buyers with bad credit in North America.