Mitsubishi Motors books one-time $78M hit as China sales slow

TOKYO — Mitsubishi Motors Corp. will take a one-time hit of 10.5 billion yen ($78.31 million) related to slowing sales at its China unit, it said on Tuesday, as mounting competition in the world's largest auto market hits foreign automakers.

Mitsubishi made no changes to its full-year results forecast as the impact from the extraordinary loss had already been incorporated into a previously announced outlook "to a certain extent".

Competition in China has increased and the warning by Mitsubishi, a minor player in the country, is the latest sign of how overseas automakers selling combustion-engine cars are facing a wake-up as China's electric vehicle drive leaves them behind.

General Motors CEO Mary Barra on Tuesday said the company plannd "aggressive measure" to cut costs throughout its China oprations, where first-quarter sales slumped 23 percent and profits slid.

GM and other western automakers face strong competition and pricing pressures, sparked by Tesla Inc., in a market that has tilted decidely to EVs. GM plans to roll out a wave of new EVs in China this year that it says will improve results in a key region.

“We’re doing everything we can to be agile in a market that’s moving pretty fast,” GM CFO Paul Jacobson said.

Toyota Motor Corp. CEO Koji Sato said on Friday the world's biggest automaker would have to move more quickly after facing pressure in China, especially in the country's growing market for battery-powered and plug-in hybrid electric vehicles.

Mitsubishi Motors said it would post the extraordinary loss despite introducing a new Outlander model in China through its local equity-method affiliate, GAC Mitsubishi Motors Co., last December.

"Amid changes in the Chinese domestic market itself and intensifying competition, sales targets continued to be missed, and profitability is expected to decline," the company, which established its China unit in 2012, said in a statement.

Mitsubishi Motors will report results for the 2022 financial year that ended on March 31 on May 9.