TOKYO -- Mitsubishi Motors on Monday forecast its second straight year of losses, hurt by a plunge in sales due in part to the coronavirus pandemic.
The automaker anticipates an operating loss of 140 billion yen ($1.33 billion) for the year ending March 2021 just as it embarks on a plan to shrink its workforce and production, and close unprofitable dealerships to cut 20 percent of fixed costs in two years.
This would be Mitsubishi's biggest loss in at least 18 years according to company financial records dating back to 2002.
"To pave the way to recovery, the top priority of all executives is to share a sense of crisis with employees to execute cost reductions," CEO Takeo Kato told reporters.
Mitsubishi reported a 53.3-billion-yen operating loss in the first quarter ended June 30, its second operating loss in three quarters after vehicle sales more than halved to 127,000 units from a year earlier.
The company booked extraordinary losses of 116 billion yen in the period and expects such losses to total 220 billion yen this year.
To preserve cash, the automaker said it would not pay a dividend this year.
The coronavirus crisis has exacerbated struggles at the company that had already been battling falling sales in China and southeast Asia, its largest market which accounts for a quarter of its sales.
As part of its restructuring plan, Mitsubishi, a junior member of the Nissan-Renault automaking group, said it would stop making the Pajero SUV crossover model next year, and close the plant in Japan which makes the vehicle.
The maker of the Outlander SUV said it would reduce its presence in Europe and North America and focus on growing in Asia.
The restructuring plan is designed to lift the company's operating profit to 50 billion yen in 2022/23 and boost operating margin to 2.3 percent from -9.5 percent now.