a n n ua l r e p o r t 2 0 0 8
Ye a r e n d e d M a r c h 3 1 , 2 0 0 8

p av i n g t h e way f o r g r o w t hMitsubishi Motors Corporate Philosophy“w e a r e c o m m it t e d to p rov i d i n g th e utmo st d r i vi n g p l eas u r e
a n d sa f et y f o r o u r va l u e d c ustom e r s a n d o u r c o m m u n i ty.
o n t h e s e com m it m e nts w e wi l l n ev e r c o m p r o m i s e.
th i s i s t h e m its u bi s h i moto r s way.”
Customer-centric approach
Mitsubishi Motors will give the highest priority to satisfying its customers, and by
doing so, become a company that enjoys the trust and confidence of the community at large. To this end, Mitsubishi Motors will strive its utmost to tackle environmental issues, to raise the level of passenger and road safety and to address otherissues of concern to car owners and the general public.

A clear direction for the development and manufacturing of Mitsubishi
Motors vehicles
The cars that Mitsubishi Motors will manufacture will embody two major concepts:
driving pleasure and safety. Mitsubishi Motors will manufacture cars that deliver
superior driving performance and superior levels of safety and durability, and assuch, those who use them will enjoy peace of mind.

Going the extra mile
Mitsubishi Motors will pay close attention to even the smallest details in the belief
that this approach will lead customers to discover new value in their cars, giving
them a richer and more rewarding driving experience.

Importance of continuity
Mitsubishi Motors will continue to manufacture distinctive cars with the passion andconviction to overcome all challenges.

Contents
Consolidated Financial Summary ............................. 01
Special Feature I: Environmental Technology ............ 02
To Our Shareholders and Stakeholders ...................... 06
Interview With the Executive Vice President ......... 12
Management ......................................................... 13
Special Feature II: Focus Markets ............................ 14
Russia and Ukraine ............................................. 15
The Middle East ................................................. 17
Brazil ............................................................... 19
China and India ................................................. 21
Regional Topics ..................................................... 22
Japan ............................................................... 22
North America ................................................... 24
Europe .............................................................. 26
Asia, ASEAN and Other Regions ............................ 28
Motor Sports ......................................................... 31
Quality ................................................................ 32
Corporate Governance ............................................ 34
Activity Report by the Business Ethics Committee .... 38
Responsibility to Society ....................................... 39
Environmental Activities ........................................ 40
Financial Section ................................................... 41
Consolidated Subsidiaries and Affiliates .................. 82
Principal Plants .................................................... 84
Investor Information ............................................. 85

First, Drive@earth means that automobiles connect us to the world. Mitsubishi‘s 4WD
legacy has catapulted a generation of drivers to every corner of the earth, from desert
dunes to city streets. Rally-tested toughness, performance and reliability make Mitsubishi
Motors a trusted name on five continents. Through this trust, Mitsubishi vehicles forge aconnection to customers, to communities, and ultimately to the natural world around us.
Second, Drive@earth means a new emphasis on environmental issues. It is the simple
recognition that no enterprise—automotive or otherwise—makes sense without thecontext of a healthy planet. With climate change and dwindling oil reserves on the mindsof drivers around the world, automakers have a special responsibility. MMC sets as its
ideal the synergy between dynamic and environmental performance, and will continue todevelop technologies—such as the zero-emissions i MiEV electric vehicle—that show asmuch care for the environment outside as for the occupants within.

Forward-looking Statements
This annual report contains forward-looking statements about Mitsubishi Motors Corporation’s plans, strategies, beliefs and performance. These forward-looking statements are based on current expectations,estimates, forecasts and projections about the industries in which Mitsubishi Motors Corporation operates, as well as management’s beliefs and assumptions. These expectations, estimates, forecasts andprojections are subject to a number of risks and uncertainties that may cause actual results to differ materially from those projected. Mitsubishi Motors Corporation, therefore, cautions readers not to place
undue reliance on forward-looking statements. Furthermore, Mitsubishi Motors Corporation undertakes no obligation to update any forward-looking statements as a result of new information, future eventsor other developments.

Consolidated Financial Summary

In millions of yen

In thousands of
U.S. dollars

FY2003

FY2004

FY2005

FY2006

FY2007

FY2007¥2,519,449¥2,122,626¥2,120,068¥2,202,869¥2,682,103$26,770,169(96,852)(128,544)

6,783

40,237

108,596

1,083,904

For the year:
Net sales
Operating income (loss)
Income (loss) before income taxes andminority interest(77,173)(460,906)(82,745)

23,104

48,151

480,599

Net income (loss)(215,424)(474,785)(92,166)

8,745

34,710346,447

In yenIn U.S. dollars

Per share data:
Net income¥(145.22)¥(194.36)¥(19.75)

¥1.59

¥6.30

$0.06

Diluted

—

—

—

0.96

3.81

0.04

Cash dividends

—

—

—

—

—

—

In millions of yen

In thousands of
U.S. dollars

At year-end:
Total assets
Total net assets¥2,029,035¥1,589,286¥1,557,570¥1,778,693¥1,609,408$16,063,562

29,972

324,782

268,678

308,304

328,132

3,275,104

Notes: 1. U.S. dollar amounts in the accompanying consolidated financial statements are converted, solely for convenience, at a rate of ¥100.19 = U.S. $1.00, theexchange rate prevailing on March 31, 2008.
2. The assets and liabilities of truck and bus operations are not reflected in each account because these operations were spun off and subsequently
became an equity-method affiliate of MMC on March 14, 2003. Furthermore, all remaining shares held by MMC had been transferred to otherparties by the end of March 2005.
3. In calculating net assets, MMC and subsidiaries have applied the “Accounting Standard for Presentation of Net Assets in the Balance Sheet”(Accounting Standard Boards of Japan (ASBJ) Statement No. 5) and the “Guidance on Accounting Standard for Presentation of Net Assets in the
Balance Sheet” (ASBJ Guidance No. 8) since the year ended March 31, 2007.

Net Sales

Operating Income (Loss)(FY)(¥ billion)

2,682.107
2,202.906(FY)

2,120.105

04

2,122.6

04
2,519.4

03

Net Income (Loss)(¥ billion)

34.7

07

8.7

06
05

03

6.8
-128.5-96.9

Total Assets

(FY)

04

40.2

06

05

03

(¥ billion)

108.6

07

-92.2
-474.8-215.4

(FY)

07
06

(¥ billion)

1,609.4
1,778.705

1,557.6

04

1,589.303

a n n ua l r e p o rt 2 0 0 8

2,029.0m i t s u b i s h i m o t o r s c o r p o r at i o n

01

02

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

u u u uSpecial Feature I: Environmental Technology

M

itsubishi Motors believes that it has a special responsibility to reduce the impact of automobiles on the
Earth’s environment. The company is stepping up efforts to refine its environmental technologies. One promising technology being developed to help prevent global warming and contribute to energy diversity is the zeroemissions i MiEV electric vehicle. Based on the i minicar platform, the i MiEV features a small, lightweight motor
powered by high-performance lithium-ion batteries, allowing it to run clean without releasing any CO2 emissions.
Slated for launch in 2009, the i MiEV is in the final stages of development.
Tokyo Electric Power Company, Kyushu Electric Power Co., Inc., The Chugoku Electric Power Co., Inc.,u
The Kansai Electric Power Co., Inc., Hokkaido Electric Power Co., Inc., Okinawa Electric Power Co., Inc.
u u
u u
u u
and Hokuriku Electric Power Companyu0w R o a dm a p t o L a u n c hu Joint research withelectric powercompanies

wFleet testing under actual driving conditions

Tokyo Electric Power Company, Kyushu Electric Power Co.,
Inc. and The Chugoku Electric Power Co., Inc.

w Early testing

2006u w w w w w w w w w w u 20

07

w w w w
w w w w w

w u w

2008u u

w

w w
w w w

w w w

u 20

09u u

u

u
u u

u u

u u

u u

201

wMarket launch

w Plans for overseas fleet testing
w Established battery company
North America: Considering joint fleet testing with electric power company
Lithium Energy Japan (December 2007)
Europe and other areas: under consideration
Shareholders: GS Yuasa Corporation, Mitsubishi Corporation and Mitsubishi Motors Corporation
Business description: Development, manufacturing and sales of large lithium-ion batteries
Start of mass production: Spring 2009

wEstablished an office to manage MiEV
operations within MMC
Renamed the MiEV Business Management Office and put
under the direct charge of the Executive Vice President
as of August 1, 2008

Making Environmental Measures a Top Priority
Developing advanced next-generation technologies in the environmental field is one of the key priorities of
the new Step Up 2010 mid-term business plan. Furthermore, in June 2008, the company unveiled a new
tagline, Drive@earth. The tagline expresses our concern for the environment while underscoring our commitment to providing the “utmost driving pleasure” and “reassuring safety” to customers in every part of theworld. The MMC group strives to fulfill its environmental responsibilities as one of its top business priorities.

Pinnacle Technologies
i MiEV Paving the Way for a Low-CO2 Society
Global warming continues unabated and the energy problem is becoming more acute. In this context, electricvehicles are drawing considerable attention. Electric vehicles emit no drive-time CO2 and sharply reducegreenhouse gas emissions even when taking into account the CO2 emissions generated at the power plantsthat provide the charge for the vehicles. Because electricity can be generated from various sources, electricvehicles could help reduce society’s dependence on fossil fuels. By generating the power used to charge
electric vehicles from wind, solar or other forms of renewable energy, total CO2 emissions from generation tooperation could be reduced to zero. By using clean electric energy as an alternative to fossil fuels, which are
finite and are a primary cause of global warming, MMC believes that the convenience of automobiles can be maintained while simultaneously realizing a

Bolstering Our Strengths: Environmental Technology

sustainable, low-carbon society.

PINNACLE TECHNOLOGIESi MiEV: Commercialization

Industry-leading, unique

MMC has been conducting joint research with electric power companies

technologies
u Launch of the i MiEV electric vehicle

since November 2006, and the i MiEV is now undergoing detailed final
quality assurance tests at the practical level through fleet tests under
actual driving conditions. In December 2007, MMC, GS Yuasa
Corporation and Mitsubishi Corporation established Lithium
Energy Japan as a joint venture to mass produce lithium-ion

NEXT-GENERATION CORETECHNOLOGIES

Clean diesel
Automated manualtransmission (TC-SST)

Defining “core” technologies
u Clean diesel (from FY2009)u Expansion of TC-SST equipped vehicles(from FY2008)

batteries. The company is accelerating the final stages ofdevelopment in preparation for bringing the i MiEV tomarket in 2009.

Alternative fuel compatibility
Improved mileage in gasoline engines
Improved drivetrain efficiency
Reduced weight/improved aerodynamics

a n n ua l r e p o rt 2 0 0 8

BASE TECHNOLOGIES
Industry-leading technologies
u New MIVEC and FFV
u CVT, high-efficiency transmissions

m i t s u b i s h i m o t o r s c o r p o r at i o n

03

04

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

Nations around the world are enforcing stricter regulations on fuel economy
and CO 2 emissions, and a growing number of countries are moving to levy
taxes on CO 2 emissions. For these and other reasons, environmental performancehas become an urgent issue for automakers. MMC is working hard to help reduce
environmental impact by equipping future vehicles with next-generation coretechnologies that are currently under development, such as clean diesel engines
and automated manual transmissions, while striving to enhance base technologies in order to improve fuel economy and reduce vehicle weight.

Next-Generation Core Technologies
Launch of clean diesel engines
MMC is developing clean diesel engines for their better fuel economy and lower CO2 emissions compared togasoline engines. Jointly developed in cooperation with Mitsubishi Heavy Industries, Ltd., 2.0-liter class models
are set to launch in Europe in 2009. By utilizing the MIVEC*1 system, which allows the variable timing of air
intake valves and the stoppage of single valves for the first time in a volume production diesel engine, MMC
has achieved top-tier output for this engine class while clearing Euro 5 standards. Development of theseengines is also targeted at meeting Tier II Bin 5 requirements in the U.S. and the Post New Long-term
Emission Regulations in Japan.
Roll-out of automated manual transmissions
The Twin Clutch SST is a manual transmission capable of executing smooth and fast automaticgear shifts that has been fitted to the Lancer Evolution X, launched in 2007. The Twin Clutch
SST’s superior power transmission delivers vastly improved fuel economy over automatic transmissions. Because of its major contribution to reducing CO2 emissions, the Twin Clutch SST isplanned for adoption in a broad range of production models going forward.

Cutting-edge Base Technologies
Alternative fuel compatibility
Bioethanol fuels, which are produced from plant matter, are an alternative to limited fossil

AUTOMATED MANUAL TRANSMISSION

fuels. Based on their carbon-neutral lifecycle,*2 bioethanol fuels release zero net CO2 emis-

Twin Clutch SST

sions into the atmosphere despite undergoing combustion. MMC launched the Pajero TR4 Flex (photoon the left page), a flex fuel vehicle (FFV) that runs on ethanol, in Brazil in July 2007. The Pajero TR4

Flex is a true 4WD vehicle that can run on gasoline, ethanol or any combination of the two. Following
Brazil, MMC will roll out FFVs in various markets around the world.
Improved mileage in gasoline engines
MMC is expanding the use of CVTs (Continuously Variable Transmission), which improves both running smoothness and fuel economy, as
well as the proprietary high-performance MIVEC engine, which delivers
both high output and superior fuel efficiency. MMC is also launchingvehicles with an idling-stop system in Europe, where the application of
tougher emissions standards are under consideration.
MIVEC SYSTEM (diagram)

Reduced weight
Reducing the weight of automobile frames greatly helps to improve fuel economy. With the help of
suppliers, MMC aims to reduce vehicle weight at least 10% compared to current models in all newmodels to be launched from 2010.
*1 MIVEC: Mitsubishi Innovative Valve timing Electronic Control*2 Carbon neutral: Neutral (zero) total carbon release achieved by offsetting CO2 released into the atmosphere from burning fuel withthe amount of atmospheric CO2 absorbed by the plants grown to make the fuel.

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n05

To Our Shareholders and Stakeholders

Takashi Nishioka

Osamu Masuko

Chairman of the Board

PresidentFiscal year 2007 marked the final year of the three-year Mitsubishi
Motors Revitalization Plan, which was implemented to ensure thecompany’s survival. During this period, we faced various headwinds, suchas falling demand in Japan, sharply higher raw materials prices, andworldwide economic turmoil triggered by the sub-prime loan issue in the
U.S. Even so, supported by the expansion of global models and strong
demand in emerging markets and resource-rich nations, we were able toachieve the plan’s initial goal of building solid profitability. I would like to
use this opportunity to express my deep appreciation to our shareholders
and other stakeholders for their support.
However, these accomplishments are merely a milestone on a long roadto achieving sustainable profitability at MMC. We understand that there aremany outstanding issues ahead, including some that became apparent
during the execution of the Mitsubishi Motors Revitalization Plan over the
past three years. In Step Up 2010, our new mid-term business planannounced in February 2008 and running through fiscal year 2010, we aim
to secure steady profits irrespective of changes in our external
environment, while building a firm operating base by bolstering ourstrengths in each business, so that we can deliver sustained growth into
the future.

Step Up 2010
Quantitative Targets (FY10)(¥ billion, Thousands of units)

Net sales
Operating income
Ordinary income
Net income

September 2008

Takashi Nishioka
Chairman of the Board

06

Sales volume

Osamu Masuko
President

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

2,760.0
90.0
71.0
50.0
1,422

“STEPPING UP”

from Revitalization to a New Stage

Fiscal Year 2007 Performance

Review of the Mitsubishi Motors Revitalization Plan

In fiscal year 2007, the MMC group reported higher net sales

The MMC group implemented the three-year Mitsubishi Motors

and earnings growth at all levels, including operating income,

Revitalization Plan to recover customer trust and to restore earn-ordinary income and net income, supported by an increase inings. Our efforts were supported mainly by Mitsubishi Heavy

overseas sales volume, an improved model mix and the effectIndustries, Ltd., Mitsubishi Corporation and Bank of Tokyo-of a weaker yen on average during the fiscal year. Operating

Mitsubishi UFJ, Ltd., mainly in the form of capital reinforcement

income and ordinary income reached new records.

and the deployment of personnel.

Worldwide sales volume increased 130,000 units, or 10.6%,

The first pillar of the plan was to recover customer trust,

year on year to 1,360,000 units. Net sales rose ¥479.2 billion

which lies at the heart of business. Here, we worked hard toyear on year to ¥2,682.1 billion on higher overseas sales

change the mindset of employees, improve quality and tovolume, the start of SUV supplies to PSA Peugeot Citroën andenhance service from the customer’s perspective. These efforts

a weaker yen against other major currencies. Operating income

were guided by the key words ‘Compliance First, Safety First andimproved ¥68.4 billion to ¥108.6 billion, as benefits from

Customer First’ under the guidance of the Business Ethics Com-higher sales volume, a better model mix and favorable foreign

mittee, which is made up of prominent individuals from outside

exchange rate movements outweighed higher advertising costs

the company. As a result, in May 2007, the Committee presented

and other selling expenses associated with the launch of new

a report stating that the initial stage was largely complete.

models in North America and reduced profits in the U.S. sales

As for the second pillar—restoring earnings—we have pro-finance business. Ordinary income improved ¥67.2 billion to

duced steady results. By bolstering our strengths in each business¥85.7 billion despite slight deterioration in non-operating

unit, we have cut back the number of single-market models andincome due to foreign exchange losses and other factors. Net

increased the number of global models, rationalized production

income totaled ¥34.7 billion, an improvement of ¥26.0 billion

overseas, strengthened our sales networks, expanded alliances andfrom the previous fiscal year, despite ¥14.6 billion in charges

streamlined the portfolio of Group companies.

related to the closure of the Australian plant and ¥21.3 billion

As a result, the company achieved operating profitability inasset impairment charges related to production facilities in thefiscal year 2005, one year ahead of schedule, and in fiscal year

U.S. and others.

2006, net profitability was achieved in accordance with theinitial plan. In fiscal year 2007, the final year of the Mitsubishi
Motors Revitalization Plan, operating income and ordinary
income both reached new records. In light of these facts, it
may be said that our primary goal of building solid profitability
has been achieved.
a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n07Step Up 2010

Step Up 2010: Key Initiatives

Positioning of the New Mid-term Business Plan and

In Step Up 2010 we are focusing on the following key initiatives,

Numerical Targets

based on our two priorities of bolstering our strengths and securing

Our new mid-term business plan, Step Up 2010, is posi-

steady profit:
First, we have positioned emerging markets expected to seetioned as the next stage for building the foundations ofgreater demand, including Russia, the Ukraine, the Middle East

growth for the future.
Step Up 2010 calls for MMC to speed up efforts to address

and Brazil, as “focus” markets. In these areas the MMC brand isissues that have become apparent so far, such as environmental

already strong, and we will reinforce our sales base by launchingissues and the need to improve earnings in Japan and Northproducts leveraging the company’s strengths. At the same time, in

America. In addition, we must also redress the imbalance between

mature markets where substantial growth in new vehicle sales

demand and production capacity for specific models, as well as

cannot be expected, such as Japan, North America and Western

improve capacity utilization. Our basic policy for addressing these

Europe, we are taking steps to improve and strengthen the profit

issues is to balance the two priorities of bolstering our strengths in

structure by increasing the efficiency of sales networks andeach business unit and securing steady profit. Over the next three

upgrading after-sales services and peripheral operations.
Next, we are pursuing greater global production efficiency inyears, we will construct the solid operating base necessary forline with our sales strategy and bolstering our ability to supply

sustainable growth in the future.

high-demand models. Additionally, as an automaker, we see grow-

In Step Up 2010, we are targeting net sales of ¥2,760.0
billion, operating income of ¥90.0 billion, ordinary income ofing environmental awareness around the world as a significant¥71.0 billion and net income of ¥50.0 billion for fiscal year

business opportunity. We believe that we can contribute to society

2010. We recognize that these numerical targets will not be

through the environmental application of practical technologies,

easy to achieve if the business environment remains challeng-which are MMC’s forte.

ing in terms of high raw materials prices, a strong yen and noFurthermore, we are investing aggressively to secure this foun-prospects for market expansion in industrialized nations. Still,

dation for sustainable growth. Our capital investment program is

we are confident that we can meet the plan’s targets and set

structured to make effective use of existing assets while achieving

the stage for sustainable growth in the future.

maximum benefits. Our R&D activities are focused on enhancing
distinctive MMC technologies and further developing environmental technologies.

Positioning of New Mid-term Business Plan (FY08-FY10)

FY2005 - FY2007
Revitalization Plan:
Building Solid Profitability

FY2008FY2009FY2010

Step Up 2010:
Building the Foundations of Growth

FY2011
Sustainable Growthfits Securing steady pro

Bolstering our strength

Restore earnings
Regain trust

Stepping up to thenext stage• Restore earnings in Japan and North America• Environmental initiatives• Improving global production efficiency tomeet fluctuating demand

Support from three Mitsubishi Group companies

08

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

Continuing and enhancing CSR activities

Bolstering Our Strengths: Regions

cars, in accordance with customer needs in each market.

While continuing to pursue our basic strategy of expanding

As for specific products, we are launching the Lancer

sales of global models, we are also refining our sales strategies

accordance with customer needs in each market.

Sportback , which shares a mid-sized platform with the
Outlander and Lancer ( Galant Fortis in Japan), startingfrom Europe. Additionally, we are cultivating new demandthrough the launch of a new Pajero Sport* SUV based on the
one-ton pickup truck, with a focus on resource-rich nations andother growth markets. We are also adding a small, fuel-efficientmodel to our renowned SUV series, in response to more stringent environmental regulations and growing environmental
awareness on the part of customers. Moreover, we are developing new models that leverage our minicar technologies in
response to worldwide interest in smaller vehicles and greater
fuel efficiency, and will position them as global small strategic
vehicles. This strategy involves expanding the application of
accumulated minicar technologies previously reserved only for
the Japanese market to global markets as global small strategic
vehicles. Finally, we are accelerating development of electricvehicles, the ultimate eco-friendly vehicle, toward the goal oflaunch in Japan and beyond.

Bolstering Our Strengths: Products* The model will be called Montero Sport in South America, Nativa in Latin
America and Challenger in Australia.

in accordance with the characteristics of individual markets.
Among emerging markets where demand is expected toincrease, we are focusing on Russia and the Ukraine, where theMitsubishi Motors brand is strong; the Middle East, where
further growth in the built-up vehicle market can be expected;
Brazil, where MMC has a high share of the SUV market; andChina and India, where there is considerable potential formarket expansion. In these markets, among our global models,
we specifically intend to boost sales of mid-sized passenger
vehicles and SUVs. In May 2008, we concluded a basic agreement with PSA Peugeot Citroën for the construction of a production base in Russia, and plant construction has begun witha view to commencing operations in 2011.
In mature markets such as Japan, North America and Western Europe, we are launching minicars and small cars alongwith environmentally friendly vehicles in a timely fashion in

While continuing to boost sales of global models, we also aim to
improve earnings and fulfill our responsibility to the environment

Alliance Strategy

by bolstering our strengths in product development. This will

From the perspectives of complementary products and tech-involve applying environmental technologies across all productnologies, and cost reduction, in the future we will pursue thegroups, from SUVs and mid-sized vehicles to minicars and small

possibility of entering into more business alliances. We already

Product direction
Financial responsibility

Step Up 2010 clarifies points of emphasiss 0ICKUP
truck-based
SUVs

Mid-sizes 'LOBAL PLATFORM
variants

SUVs
s 3MALL FUEL EFFICIENT 356S

Minicars, small cars
s 3MALL VEHICLES
s %LECTRIC VEHICLESIntroduced during the Revitalization Plan:s -ID SIZE
platform seriess i minicars Pajero, etc.

Environmental responsibility

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n

09supply passenger and commercial-use minicars to Nissan Motortrucks, continue to operate at high capacity utilization rates. To

Co., Ltd. on an OEM basis, and we plan to start supplying the

make better use of overcapacity at our Netherlands Plant, we

company with the mini SUV model Pajero Mini on an OEM

transferred production of the Outlander for the European market

basis in autumn 2008. In addition, we have started to consider

from the Okazaki Plant to that facility in August 2008, followed

cooperation with Nissan on the development and OEM supply

by the shift of production of PSA-bound SUVs from theof small commercial vehicles built on a mini commercial vehi-

Mizushima Plant, thereby opening up production capacity at ourcle platform for the domestic and overseas markets, with andomestic plants. With these moves, we aim to construct a pro-emphasis on producing results in ASEAN and other Asian

duction system that is more efficient and better able to respondnations. MMC started supplying PSA Peugeot Citroën (PSA)

to changes in demand for individual models, thereby avoiding

with an SUV model in May 2007, and with this venture pro-

missed sales opportunities and maximizing profits.

gressing steadily, we concluded a contract with PSA for local
production in Russia. Moreover, PSA and MMC have agreed to

Measures for Improving Profits

consider collaborating in the area of electric vehicles. We will

Measures to improve profits naturally include closer coopera-

continue to broadly search for win-win collaborations and alli-tion among the development, production and sales divisions, as

ances on individual business ventures.

well as stronger ties with members of the MMC Group, including dealers and suppliers, and the pursuit of more improvements on a global scale.

Sales Volume Target
MMC targets sales volume of 1,422,000 units in fiscal year

First, we are enhancing our logistics processes so as to elimi-

2010, an increase of approximately 5%, or 62,000 units, fromnate waste and to improve efficiency. We will do this by reducing

fiscal year 2007. Specifically, we are targeting steady increases

costs through more rigorous inventory management and byin sales volume in high-growth markets, such as Russia and theupgrading functions for adjusting the supply-demand balance.

Ukraine, and approximately 35% growth for the European

Second, we are working to expand profits in peripheral busi-

market as a whole, including the aforementioned nations. We

nesses, mainly in mature markets. Specifically, in Japan, because

also see strong prospects for volume growth in resource-richthe turnover period for new vehicles is becoming longer, we havenations in the Middle East, Latin America and elsewhere.

positioned policies aimed at strengthening ties with customers.
We will strengthen the sales companies’ marketing base by offer-

Boosting Global Production Efficiency

ing an increased number of products and service menus thatAt the start of the Mitsubishi Motors Revitalization Plan, one ofreflect customer needs. Finally, we have implemented programs

the most important issues was overcapacity in production. By

to reduce materials costs. Because of persistently high crude oil

fiscal year 2007, almost all of this overcapacity was eliminated.

prices, we must prepare for the risk of sharp increases in raw

Currently, our three plants in Japan and our production facility inmaterials costs and ensure stable procurement. We are therefore

Thailand, which serves as an export base for one-ton pickup

working to establish a more robust procurement framework by

Reinforcing and Expanding Alliances

Current collaboration

FY2008 and beyond

Models supplied

Models to supply

s .ISSAN COMMERCIAL MINICARS MINICARS
s 03! 0EUGEOT #ITROÑN 356S
s $AIMLER GASOLINE ENGINES

s ;*APAN= .ISSAN MINICARS FALL  ONWARDS(Pajero Mini)

Models procured
Models procureds ;*APAN= -AZDA COMMERCIAL VEHICLESs ;.ORTH !MERICA= #HRYSLER 0ICKUPSs ;)NDONESIA= 3UZUKI PASSENGER VEHICLESs ;*APAN= .ISSAN SMALL COMMERCIAL VEHICLES(fall 2008 onwards)(Nissan model name: AD/AD Expert)

Production
Components procureds 03! 0EUGEOT #ITROÑN DIESEL ENGINES
s $AIMLER DIESEL ENGINES GASOLINE ENGINES
s 6OLKSWAGEN DIESEL ENGINES

Environmental technologies
s *OINT DEVELOPMENT OF DIESEL ENGINE WITH
Mitsubishi Heavy Industries
s &OUNDED LITHIUM ION BATTERY VENTURE WITH '3
Yuasa and Mitsubishi Corporation

10s ;2USSIA= 03! 0EUGEOT #ITROÑN JOINT VENTURE FOR
local production (start production in 2011)

Under considerations .ISSAN COOPERATION REGARDING LIGHT COMMERCIAL
vehicles based on minicar-class commercial
vehicles in Japan and overseas

Futures %XPAND /%- EXCHANGE MODELSs -UTUAL SUPPLY OF COMPONENTS
s 03! 0EUGEOT #ITROÑN COLLABORATION ON
powertrains for electric vehicles

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

Alliance benefits
u Better able to meet customer needs thanks
to procured technology and products
u Improved productivity including better
capacity utilizationu Cut costs (R&D expenses, fixed expenses,
equipment investment)strengthening relationships with business partners and standard-

focusing development efforts on electric vehicles, clean diesel

izing more parts and components across vehicle models. Alongengines and other environmentally friendly technologies.

with this, we are stepping up efforts to reduce costs from the* S-AWC: An advanced vehicle dynamics control system that regulates drive
torque and braking force at each wheel

initial development stage onwards.
Capital Investment and R&D Expenditures

Financial Strategy

MMC aggressively invests in fields expected to become

In terms of financial strategy, MMC will efficiently procuresources of sustainable growth in the future, including environ-

funds needed for proactive capital investment and R&D. We

mental technologies and emerging markets.

will rely on loans as our primary fund raising method, but will

Our policy on capital expenditures is to maximize benefits

work at the same time to improve cash flow. As a result, interest-

by utilizing existing assets to hold down new investment. To

bearing debt at the end of fiscal year 2010 is projected at

illustrate, we are reinforcing our product lineup by, among

mostly the same level as at the end of fiscal year 2007. As forother things, expanding the rollout of vehicles built on ourcapital strategy, which is a particularly important issue for the

mid-sized platform, which has won consumer confidence withcompany at this time, we will follow the Step Up 2010 plan

the Outlander, Delica D:5 and Lancer. Additionally, we willwith a view to resuming dividend payments in the future.
We expect the initiatives that have already been executed

secure necessary production capacity without heavy new
investment by utilizing the existing facilities of our Netherlands

under Step Up 2010 to steadily bear fruit. Looking at fiscal

plant. Furthermore, we are constructing a new painting facility

year 2008 alone, the business environment is shaping up to beat our Okazaki Plant to boost productivity and to further

challenging, including adverse foreign exchange rate move-

reduce the environmental impact of our manufacturing pro-ments and further increases in raw materials costs. Conse-

cesses. We are also increasing investment in upgrading ourquently, we are forecasting lower sales and earnings for the fullproduction framework, increasing both vehicle and component

fiscal year. Over the medium and long term, however, we areproduction capacity to meet rising demand.

confident that the steady execution of these programs will

Regarding R&D, we are focusing on strengthening MMC’s

make MMC more resilient to changes in the operating environ-unique technologies. Measures include expanding our SUV andment and enhance its ability to generate steady profits, thereby

super all-wheel control (S-AWC)* technologies. We are boosting

realizing the construction of a foundation for sustainable

development efficiency by applying existing technologies while

growth over the long term.
September 2008

Factors Behind Changes in Operating Income(FY2007 Versus FY2010)

Osamu Masukos Environmental technology

Costcutting
Operational
improvements

President

R&D expensess New products, etc.
Depreciations Assumed forex rate
FY07 FY10

s Lower materials costss Process restructuring,etc.

s Restructuring of Australian
operationss Switch to proprietary diesels New models engine, etc.
s More built-up
vehicles, etc.

Forex

USD
EUR
AUD

115
162
100

105
155
90

Model mix

FY2007¥108.6billion

FY2010Target¥90.0
billiona n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n

11Interview With the Executive Vice PresidentT

he new Step Up 2010 Office was established with the launch of the new mid-term business plan in April 2008. Here,Mr. Makoto Maeda, Executive Vice President and Corporate General Manager of the Step Up 2010 Office, discusses
policies and his ambitions for the plan.

“Whole-company” Reforms

The theme of this program was to transmit manufacturing skills to

The Step Up 2010 Office is responsible for rigorously building andup-and-coming ambitious employees. I also started a similar pro-rolling out a solid earnings structure into all divisions. We aim togram called “Monozukuri juku,” which taught about the spectrum

embed a whole-company perspective to each department, toof processes and technologies from product planning to after-sales

achieve optimal results for the company as a whole. I am confident

service, for the purpose of adding the whole-company perspectivethat we can overcome the current challenging business environ-mentioned earlier to reform plans. My goal is to spread these activi-

ment by enabling the company to move quickly on the issues with

ties throughout the entire company.

a shared sense of direction. This means implementing reforms in
manufacturing, costs and operations that pose solutions from aEnhancement of Earnings Structure“whole-company,” rather than a departmental, perspective.

We are working to expand volume per platform, achieve further
standardization of parts with fewer categories, and boost global

Supporting Ambitious Employees

production efficiency. We want to bring together the company’s

Manufacturing reforms are aimed at eliminating overburdening,collective expertise to optimize costs.

redundancy and inefficiency through tighter integration of all stages

Additionally, to generate stable profits, in mature markets

from product planning to development, purchasing, production andwhere future growth cannot be expected we are looking beyond

logistics to sales. When I was in charge of the production division, I

new-vehicle sales to expanding profits from peripheral businesses

initiated a program called the “Monozukuri Dojo.” Monozukuri

such as after-sales services.

means craftsmanship and a dojo refers to a traditional training hall.
We will make progress toward our goals by breaking down barriers
between divisions and bolstering our capabilities on the factory
floor with improved manufacturing techniques. We will overcome
the issues before us one by one. Our goal for fiscal year 2010 is tomake MMC a stronger company that can achieve sustainablegrowth in the years to come.
September 2008

Makoto Maeda
Executive Vice President,
Corporate General Manager of
Step Up 2010 Office12

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

Management
As of August 1, 2008

Members of the Board

Takashi Nishioka*

Osamu Masuko*

Makoto Maeda*

Hiizu Ichikawa*

Hiroshi Harunari

Chairman of the Board

President

Executive Vice President
Corporate General Manager of Step
Up 2010 Office
In Charge of Russian Project &MiEV Business Management

Managing Director
In Charge of CSR, Corporate Affairs &Finance Group Headquarters
Chief Business Ethics Officer

Managing Director
President & CEO–Mitsubishi Motors
North America, Inc.

Tetsuro Aikawa

Mitsuo Hashimoto

Kazuyuki Kikuchi

Shuichi Aoto

Osamu Matsumoto

Managing Director
In Charge of Product Strategy &Development Group Headquarters

Managing Director
In Charge of Domestic Sales
Office & After sales Service Group
Headquarters

Managing Director
In Charge of Overseas Operations
Group Headquarters
Corporate General Manager of
Oceania, Latin America, Middle East
and Africa OfficeDirector
In Charge of Corporate Planning,
Controlling & Accounting Group
Headquarters
Corporate General Manager ofControlling & Accounting OfficeDirector
In Charge of Production
Group Headquarters

Seiichi Ohta

Hiroshi Kuroda

Mikio Sasaki

Hidetoshi Yajima

Director
In Charge of Quality Affairs Group
Headquarters

Director
In Charge of Procurement Group
Headquarters

Director(Non-Executive Director)

Director(Non-Executive Director)

Norihide Ujita

Kenji Egawa

Shigemitsu Miki

Hiroshi Kan

Yukio Okamoto

Statutory Auditor(Full-time)

Statutory Auditor(Full-time)

Statutory Auditor(Outside Statutory Auditor)

Statutory Auditor(Outside Statutory Auditor)

Statutory Auditor(Outside Statutory Auditor)

Shuma Uchino

Shinichi Kurihara

Katsuo Terao

Masahide Konishi

Shiro Futaki

Senior Executive Officer
Corporate General Manager ofCorporate Planning Office and Vice
Corporate General Manager of Step
Up 2010 OfficeSenior Executive Officer
Corporate General Manager of
Product Strategy OfficeSenior Executive Officer
Assistant to Managing Director andCorporate General Manager of Domestic
Sales Innovation OfficeSenior Executive Officer
Assistant to Managing Director

Senior Executive Officer
President & Chief Executive Officer,
Manufacturing–Mitsubishi Motors
North America Inc.

Yoshikazu Nakamura

Masao Ohmichi

Keizo Fuchita

Kazuya Matsushita

Masao Uesugi

Executive Officer
Corporate General Manager of CSR
Promotion Office

Executive Officer
Assistant to President and Vice
Corporate General Manager of CSR
Promotion Office

Executive Officer
Corporate General Manager ofCorporate Affairs Office

Executive Officer
Corporate General Manager of Finance
Office and General Manager ofFinancial Planning Department

Executive Officer
Product Executive (RV1)

Ryugo Nakao

Akinori Nakanishi

Yasuo Ohyama

Shuzo Muramoto

Hisayoshi Kumai

Executive Officer
Corporate General Manager of Development Engineering Office and General
Manager of Cost Reduction Activity
Promoting Office

Executive Officer
Corporate General Manager of Design
OfficeExecutive Officer
Plant General Manager of Nagoya
Plant

Executive Officer
Plant General Manager of Powertrain
Plant

Executive Officer
Corporate General Manager ofDomestic Sales Office

Yoichi Yokozawa

Toshifumi Sudo

Toshihiko Hattori

Michiro Imai

Executive Officer
Corporate General Manager ofOverseas Business Management
Office, General Manager of Overseas
Business Management Department
and Assistant to Executive Vice
0RESIDENT ;3TEP 5P  /FFICE=

Executive Officer
Corporate General Manager of Europe
OfficeExecutive Officer
Corporate General Manager of Asia &ASEAN Office

Executive Officer
President–Mitsubishi
Motors Thailand Co., Ltd.

Statutory Auditors

Executive Officers* Representative Director

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n

13Special Feature Ⅱ: Focus Markets

Under the new mid-term business plan, Step Up 2010, MMC aims to build the foundations for growth. As part of thisplan, among markets expected to see greater demand, MMC calls those where the strength of the Mitsubishi Motors
brand can be leveraged “focus” markets. The company is working to strengthen its model lineup while taking steps toboost sales volume.

14

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

PHOTO ON LEFT PAGE:
SHOWROOM AT DEALERSHIPOPERATED BY RUSSIAN SALESCOMPANY ROLF IMPORTPHOTO ON RIGHT PAGE:
EXTERIOR VIEW OF A ROLF
IMPORT DEALERSHIP

RussiaIn resource-rich Russia, consumers enjoy strong purchasing power, and Mitsubishi vehicles havegarnered a strong reputation, as testified by its three local Car of the Year awards. As a result, Russia is
positioned as a focus market for driving growth in the larger European region.
Targeting 60% Growth in Sales Volume in 2010
Through Expansion of Local Sales Network

MMC Sales Volume and Number of Dealerships in Russia

MMC is bolstering its lineup of SUVs and mid-sized pas-

(Year)

senger vehicles, which are expected to remain in strong

10

demand in Russia. Meanwhile, the company plans to08

increase the number of sales bases in Russia from 106 at the07

end of 2007 to 142 at the end of 2010. Efforts are also

(Thousand units/No. of dealerships)
170 (Forecast)142 (Forecast)140 (Forecast)
107

106

70

06

91

focused on expanding sales by strengthening ties with local
sales company Rolf Import. Target sales volume is expected
to hit 170,000 units in fiscal year 2010, up approximately
60% from fiscal year 2007.

05

57

81

37

04

■ Sales Volume (Fiscal year)

126 (Forecast)

60■

Number of Dealerships (Calendar year)

Began Construction of New Plant for Local Production
Via Joint Venture With PSA Peugeot Citroën
In May 2008, in order to stably produce and supply vehicles to the Russian market for long term, MMC concluded a joint venture agreement with PSA Peugeot Citroën concerning local vehicle production, which
carries import tariff benefits. A groundbreaking ceremony for the local plant was conducted in June 2008.
Currently, preparations are steadily under way for the start of operations in 2011.

UkraineUkraine has experienced sustained strong economic growth since 2000, and demand for automobiles,
especially overseas brands, has continued to expand. Total vehicle demand is expected to reachapproximately 940,000 units in 2010. Mitsubishi vehicles benefit from a strong reputation in the
Ukrainian market, having achieved the top sales volume among imported brands for four consecutive
years since 2004.
Driving Sales Growth With an Expanding Dealership Network
To further expand sales in the Ukrainian market, MMC is upgrading and expanding its lineup centered on
SUVs, as in Russia. In parallel, the company is expanding its dealer network, targeting 85 sales bases in the
Ukraine by the end of 2010, up from 51 bases at the end of 2007.
In April 2008, as in Russia, MMC began directly managing its operations in the Ukrainian market, which
had previously been overseen by Mitsubishi Motors Europe B.V. (MME), a Netherlands-based sales subsidiary overseeing Europe. This move will allow MMC to establish a support system for the sales company that
rapidly and precisely takes into account market needs, as it works to further strengthen sales activities.

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n

15

16

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

PHOTO ON LEFT PAGE:
DUBAI IS NOT ONLY ONE OF THE
U.A.E.’S KEY BUSINESS CENTERS, BUT
ALSO ONE OF THE FASTEST GROWINGCITIES IN THE WORLD. LINED WITHSKYSCRAPERS, SHEIKH ZAYED ROAD
IS ONE OF THE CITY’S MAIN
THOROUGHFARES.
PHOTO ON RIGHT PAGE:
EXTERIOR AND INTERIOR VIEWS OF
SHOWROOM ON SHEIKH ZAYED ROADOPERATED BY MMC SALES COMPANY
AL HABTOOR MOTORSThe Middle East
The Middle East, a resource-rich region, is now experiencing accelerated growth. New vehicle sales
volume is also growing rapidly, supported by demand for high-value-added products. Total demand forJapanese-brand vehicles is expected to reach approximately 900,000 units in fiscal year 2010.
Growing Demand for Mitsubishi Brand Vehicles in the Strong Middle East Market
Due to the regional characteristics of the Middle East market, there is high demand for SUVs, pickup trucks
and C-segment vehicles. MMC has established an advantageous market position in this region with its formidable lineup of models in each category. Following the launch of its new Lancer sedan in 2007, MMC is working
to further expand sales by aggressively introducing new models from 2008, including the Lancer Evolution, ahigh-performance 4WD sports sedan, and the sporty Eclipse coupe.

Establishing a Centralized Sales Company in Dubai
During fiscal year 2008, MMC plans to combine its Dubai liaison office with Mitsubishi Motor Parts Sales ofGulf FZE (MMGF), located in Dubai, UAE. This merger will form Mitsubishi Motors Middle East & Africa
FZE (tentative name), a sales company overseeing sales, marketing, parts, R&D and service functions. By
strengthening vehicle marketing, and parts and service in a “three-in-one” structure at the new company,
MMC aims to foster closer cooperation in each field.
Additionally, the new company will represent MMC in the Middle East and assist with the formulation ofregional business plans, as well as product, price and volume targets. Further, it will provide comprehensive
support for sales and trading companies by, among other things, working to strengthen communication
through visits to sales companies and constructing a value chain.

Raising the Profile of the Mitsubishi Brand
MMC will also use the new company as a foothold to cultivate new markets, such as Iraq, the CIS and emerging African nations, while taking steps to accelerate the creation of new business opportunities in existing
local markets, including Saudi Arabia, Iran, Egypt and Algeria. Our goal is to strengthen the Mitsubishi brandby heightening the presence of Mitsubishi vehicles throughout the Middle East and Africa.

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n

17

18

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

PHOTO ON LEFT PAGE:ASSEMBLY PLANT OF LOCALBRAZILIAN PARTNER MMCBPHOTO ON RIGHT PAGE:
AN ANNUAL SERIES OF MOTOR
SPORTS EVENTS HELD BY MMCB
(PHOTO BY THOMAS KREMER)

Brazil"RAZIL EXPECTS STABLE ECONOMIC GROWTH GOING FORWARD SUPPORTED BY SHARPLY HIGHER PRICES FOR MINERALS
and other resources. Total vehicle demand grew 27.8% year on year to 2.46 million units in 2007,
surpassing the 2 million unit level for the first time in the nation’s history, and thereby resulting in"RAZIL EMERGING AS ,ATIN !MERICAS LARGEST AUTOMOBILE MARKETEstablishing Mitsubishi Motors as a Premium Brand
by Focusing on SUVs and Pickup Trucks
In the Brazilian market, MMC sells imported built-up

Total Vehicle Demand in Brazil and Share of FFVs
(Million units/%)(Calendar year)07

vehicles and locally produced models through MMC

06

Automotores do Brasil Ltda. (MMCB). MMC has estab-

05

81

focused on SUVs and pickup trucks in parallel with participation in various motor sports using these same models.

1.71

47

04
03

1.93

74

lished itself as a premium brand through a product strategy

2.46

1.63

20
1.38

3.5

MMC will continue to position Brazil as a core market
for business in Latin America. Following the new L200

■ Total demand■

Share of FFVs

(Triton) one-ton pickup truck, for which local productioncommenced in October 2007, MMC will augment its lineup
with attractive models for a broader range of customers,
mainly by rolling out more variations of locally produced models and launching new imported built-up vehicles. Furthermore, the company is carrying out a strategy of enhancing support for the local production andsales company with the aim of sustaining and enhancing its brand image and further expanding sales.

Enhancing the FFV Lineup to Capitalize on Rapid Growth in the FFV Market
Specifically, MMC is accelerating the development and production of flex-fuel vehicles (FFVs) that run on
gasoline, ethanol or any combination of these fuels, as our top priority in the Brazil market. FFVs accounted
for 81% of total new vehicle sales in Brazil in 2007, up from 3.5% in 2003. The Pajero TR4 Flex FFV, jointly
developed with MMCB, went on sale in July 2007, becoming Brazil’s first “true 4WD” FFV. Boasting a sales
volume of 7,500 units in its first year on the market, the Pajero TR4 Flex FFV went on to achieve 25% yearon-year growth in fiscal year 2007. Having proactively captured this market opportunity, MMC will continue
to upgrade and enhance its FFV lineup.

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n

19

20

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

1 2

5

Beijing Office
MITSUBISHI MOTORS BOOTH
AT THE 2008 BEIJINGINTERNATIONAL AUTOMOTIVEEXHIBITION HELD IN APRIL 2008

3 4
7
6

Principal Operational Facilities in China
1 Harbin Hafei Motor Co., Ltd.

Production and sales of Mirage Dingo (Saima)
Capitalization: CNY 410 million
Shareholder: Harbin Air-Craft Industry 100%
(MMC holds no equity stake)

5 Shenyang Aerospace Mitsubishi

Motors Engine Manufacturing Co., Ltd.
Production and sales of engines(2000cc–2400cc)
Capitalization: CNY 738 million
Shareholders: China Aerospace Automotive
30.0%, Shenyang Jianhua Motors Engine
21.0%, MMC 25.0%, MC 9.3%, others 14.7%

2 Harbin Dongan Automotive Engine

Manufacturing Co., Ltd.
Manufacturing and sales of engines(1300–2000cc) and transmissions
Capitalization: CNY 500 million
Shareholders: Harbin Dongan 55.0%, Harbin Hafei
15.0%, MMC 15.3%, MC 5.7%, others 9.0%

3 Mitsubishi Corporation (Shanghai) Ltd.

Distributor of built-up vehicles
Shareholder: Mitsubishi Corporation (China)
Investment Co., Ltd. 100.0%

6 South East (Fujian) Motor Corporation, Ltd.

7 Hunan Changfeng Motor Co., Ltd.

Production and sales of Galant, Lancer, etc.
Capitalization: USD 138 million
Shareholders: Local 50%, MMC 25.0%, Taiwan
China Motors 25%

Production and sales of Pajero

4 Lingfa Car Technical Consulting(Shanghai) Ltd.
R&D Center
Capitalization: JPY 30 million
Shareholder: MMC 100%

Capitalization: CNY 401 million
Shareholders: Changfeng Group 50.61%, MMC
14.59%, others 34.80%

China
In China, vehicle demand is projected at around 12 million units in 2010 due to growth in personal
INCOME LEVELS AS THE ECONOMY IS ENERGIZED BY THE 3UMMER /LYMPIC 'AMES IN "EIJING AND THE 7ORLD %XPO
in Shanghai. For this reason, MMC has positioned China as one of its most important markets in Asia.
Establishing New Company in 2009 to Enhance Local Sales Network
Over the next three years through fiscal year 2010, MMC plans to launch six models in China, consisting ofboth locally produced automobiles and imported built-up vehicles, including the Lancer Evolution, Lancer
and Eclipse. At the same time, the company is bolstering its earnings base by focusing on its local production
and sales business, which includes South East (Fujian) Motor Co., Ltd., and Hunan Changfeng Motor Co., Ltd.,as well as its engine business, which includes Shenyang Aerospace Mitsubishi Motors Engine ManufacturingCo., Ltd., and Harbin Dongan Automotive Engine Manufacturing Co., Ltd.
Strengthening the sales network for Mitsubishi brand vehicles, including locally produced models, is also
important. To this end, MMC plans to establish a new company in 2009. The new company will work toachieve greater uniformity in terms of sales and service quality, as well as to combine sales operations oflocally produced Mitsubishi brand vehicles and imported built-up vehicles at the dealership level andenhance the brand image of Mitsubishi Motors throughout China.

India)N )NDIA WHERE RAPID MOTORIZATION IS CURRENTLY UNDER WAY VEHICLE SALES VOLUME EXCLUDING TRUCKS AND
buses) reached 1.58 million units in fiscal year 2007. Moreover, total vehicle demand (excluding trucks
and buses) is expected to reach approximately 2.60 million units in fiscal year 2010. Demand for cars
and SUVs in the premium-price band, which MMC is targeting, is projected to reach 350,000 units.
Heightening Our Presence as a Premium Brand by Harnessing the Advantages of Mitsubishi
Cars and SUVs
In this market, MMC aims to heighten its presence as a premium brand. Based on this strategy, in addition tolaunching the new Outlander SUV in fiscal year 2008, we are accelerating efforts to enhance the marketabilityof existing models, including those produced locally. Our goal is to achieve steady volume growth in thepremium car and SUV segments, which are our strong suit.
We are also working to bolster our sales capabilities by expanding and upgrading our sales networks,
particularly in major cities such as Delhi and Mumbai.
a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n

21Regional Topics

Japan
In the mature Japanese market, MMC is meeting customer expectations by supplying products that are ‘uniquely
Mitsubishi,’ along with high-quality service. Our new mid-term business plan, Step Up 2010, targets a return to profitability for the domestic business. Toward this end, the company is striving to supply services that fully address
customer needs and enhance customer satisfaction so that MMC products remain the vehicles of choice for customers over the years to come. Simultaneously, steps are being taken to boost dealership sales, based on sales negotiations as a proportion of total sales volume. The company is also maintaining a profit-oriented sales strategy andpursuing greater operational efficiency, including the restructuring of its domestic sales network.

Overview of Fiscal Year 2007 and Outlook for Fiscal Year 2008

Initiatives Under the New Mid-term Business Plan

Retail sales in the Japanese market totaled 219,000 units in fiscal

Step Up 2010 targets a return to profitability for the domestic businessyear 2007, decreasing 11.3% year on year.

by fiscal year 2010. Specifically, because the prospects for an increase

In Japan’s challenging domestic climate, total automobile demand

in total demand are dim and the operating environment is expected tofor the market as a whole showed no signs of a rebound, falling 4.8%

remain harsh, the plan calls for the steady acceleration of efforts toyear on year. Despite these circumstances, in addition to strong salesbuild the foundations for growth through the pursuit of greater operat-of the Delica D:5 model (launched in January 2007), the new GalantFortis sedan (introduced in August 2007) achieved sales three times
higher than its monthly target only three weeks after launch. Additionally, the Lancer Evolution X was awarded a special prize (MostFun) by the Final Selection Committee of Car of the Year Japan
2007-2008. These factors supported a 9.9% year-on-year increase inregistered vehicle sales. However, MMC was unable to achieve an
increase in total sales for the full fiscal year because of a large drop inminicar sales, which reflected its decision to refrain from low-margintransactions.
As a result, Japanese sales in fiscal year 2007 declined 3.5% year on
year to ¥488.5 billion. However, the operating loss narrowed by ¥24.9
billion from the previous fiscal year to ¥18.9 billion. This improvement
reflected higher sales of registered vehicles with high profit margins,
penetration of our profit-oriented sales policy, and benefits from theregional integration of consolidated sales companies.
In fiscal year 2008, MMC is targeting Japanese retail sales of
207,000 units, down 5.5% from fiscal year 2007, factoring in weak
total demand in Japan.

ing efficiency and the continuation of a profit-oriented sales strategy.
The key measures and policies for the fiscal year 2008 are: to improve
the profitability of new vehicles; build brand loyalty and lifelong
relationships with customers; make the sales system more efficient;and bolster the vehicle lineup by introducing new models.
Improving New Vehicle Profitability
Along with the reassessment of transactions with relatively low
profit margins, including fleet sales, MMC is working to improve
new vehicle profitability by increasing the ratio of dealership sales.
At the core of these efforts is the full-scale extension of a sales
capability program, which has proved highly effective at our consolidated sales companies, to independent dealerships.
Building Brand Loyalty and Establishing Lifelong Relationships
With Customers
Exhibitions tied to sales and service, improvements and expansion of after-sales services are expected to increase dealer traffic.

Galant Fortis

22

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

Step Up 2010 Regional Strategies

Profit-oriented sales
AND MAXIMIZEDbusiness efficiency

Building Brand Loyalty and Establishing Lifelong
Relationships with Customers

Bolstering Lineup by Introducing New Modelss New Toppo minicar (autumn 2008)s Galant Fortis sports hatchback (winter 2008)
Improving Profit Margin of New Vehicle Saless Expanding and upgrading after-sales service productss Improving customer satisfaction by bolstering
service capabilitiess Increase the ratio of dealership sales

Making the Sales System More Efficients Compact commercial vehicle (autumn 2008)s Construct a sales network with high operational efficiencys Create outlets that attract customers from a broader area

In conjunction, MMC is working to turn buyers of MMC vehicles
into repeat customers by enhancing the quality of customer service.

Net Sales(FY)(¥ billion)

520.0 (Forecast)

08

488.5

07

Making the Sales System More Efficient
MMC is constructing a highly efficient sales network by realigningits sales bases to eliminate redundancies and gaps and by acceler-

06

506.0

05

504.1

ating the deployment of a dealership network that attracts customers spread out over larger areas. In conjunction, efforts to reduce
fixed costs are under way through the streamlining of back-office

Operating Loss

departments at MMC and at consolidated sales companies, thus

(FY)(¥ billion)08-12.0 (Forecast)boosting the operational efficiency of the sales framework.
07

Bolstering the Lineup by Introducing New Models
In fiscal year 2008, MMC will be introducing products that are

-18.9

06
05

-43.8
-55.3

‘uniquely Mitsubishi,’ including a new minicar, Toppo, and asports hatchback version of Galant Fortis. Along with this, theproduct lineup will be bolstered by selling small commercial vehi-

Retail Sales

cles sourced from Nissan Motor Co., Ltd. on an OEM basis.

(FY)

08
07
06
05

(Thousand units)

207 (Forecast)
219
247
257

Toppo

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n23North America
In fiscal year 2006, MMC appointed a new management team at Mitsubishi Motors North America, Inc. (MMNA).
7HILE WORKING TO PUT IN PLACE AN ORGANIZATIONAL STRUCTURE THAT IS STRONGLY LINKED TO (EAD /FFICE THE COMPANY REINforced sales support and worked to forge stronger relationships of trust with dealers. As a result, the North American operation had been improving, but the direction of the overall American market has become increasingly murky
due to the sub-prime mortgage crisis in the U.S.
5NDER OUR NEW MID TERM BUSINESS PLAN 3TEP 5P  --# IS WORKING TO STABILIZE OPERATIONS BY FURTHER REINforcing the sales network and bolstering the image of the Mitsubishi Motors brand.

Overview of Fiscal Year 2007 and Outlook for Fiscal Year 2008

including the impact of transferring sales figures for Puerto Rico

Retail sales in the North American market totaled 172,000 units infrom the North American total to the Asia, ASEAN and Otherfiscal year 2007, increasing 4.7% year on year.

regions total.

In the U.S., sales of the new Outlander, launched in November 2006, and the new Lancer, which made its global debut in theInitiatives Under the New Mid-term Business Plan

U.S. in March 2007, posted strong sales. This supported faster

In North America, stabilizing operations is one of the main themes

sales growth than in fiscal year 2006, which marked the first year-of the new Step Up 2010 mid-term business plan.

on-year sales growth in five fiscal years. However, from the second

Sales of the new Lancer, which were fully launched in April 2007,

half of fiscal year 2007, falling demand stemming from the sub-made a strong start and remained healthy throughout the full fiscal

prime mortgage crisis and escalating sales competition resulted inyear, contributing to higher sales volume. The new Lancer Evolution,slower sales growth. As a result of this and the impact of a change

rolled out in January 2008, became available with an optional auto-in the model mix, U.S. sales for the full fiscal year were largely themated manual transmission “Twin Clutch SST” in June of fiscal year

same as the previous fiscal year. Meanwhile, Canadian sales rose

2008. Plans are to launch the turbocharged Lancer Ralliart in autumn

50% year on year due to strong sales of new models.

as part of a program to further strengthen the new Lancer series. In

As a result of the above, net sales in North America declined
4.9% year on year to ¥402.7 billion. Operating income deteriorated

this way, the Lancer is fulfilling its role as a driver of the North
American business.

¥18.4 billion to an operating loss of ¥17.8 billion due to higher
selling expenses, including advertising costs, associated with theUnited States: Start Eclipse Exports to the Middle East,launch of new models in North America, and to lower earnings

China and Korea

from the U.S. sales finance business.

In the United States, as part of its efforts to ‘build the foundations

In fiscal year 2008, MMC is targeting North American sales of
145,000 units, down 15.7% compared with fiscal year 2007,

for growth,’ MMC has started exporting the Eclipse, which is
produced at MMNA’s plant in Illinois, to the growth markets of

Outlander

24

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

Step Up 2010 Regional Strategies

Strengthening of the
Mitsubishi Motors brandover the medium andlong terms

Bolstering Lineup by Introducing New Models in theLancer Seriess Lancer Evolution SST model (June 2008)s Lancer Ralliart (autumn 2008)
United Statess Continuation of plan to energize the dealership networks Ongoing efforts to reduce costs and streamline MMNA’s
plant

the Middle East and China, as well as to Korea, a market expected

Net Sales

to present greater sales opportunities to Japanese automakers.

(FY)

Additionally, we are taking steps to enhance the MMC brand overs Expand exports of the Eclipse, produced at MMNA’s
plant in Illinois, to the Middle East, China, and Korea

Canadas Expand sales network: from 68 outlets (end-FY2007) to85 outlets (end-FY2008)s Construct new parts warehouse in Toronto to strengthen
after-sales operation(¥ billion)

300.0 (Forecast)

08

402.7

the medium and long terms by building strong relationships of07

trust with existing dealers while steadfastly continuing to provide

06

423.6

05

415.7

services to customers together with the dealers. On the cost side,
we are working to reduce costs in all areas of production and sales
and thereby achieve greater operational efficiency.
Canada: Targeting Sales Volume of 20,000+ Units

Operating Income (Loss)(FY)

In Canada, in addition to sustaining growth centered on the new

08 -27.0 (Forecast)Lancer and Outlander, we will further strengthen the lineup with07

the first-ever launch of the Lancer Evolution. We will also expand
and reinforce our sales network. Backed by these enhancements,
we are targeting annual sales of over 20,000 units. Moreover, we(¥ billion)

-17.8

06
05

0.6
-7.2

are constructing a new parts warehouse in Toronto to reduce leadtimes for the supply of repair parts, and thus heighten customer
satisfaction. In conjunction, we are working to reduce distribution
costs as part of an overall effort to bolster our after-sales operation.

Retail Sales(FY)(Thousand units)08

145 (Forecast)

07

172

06
05

164
156

Lancer Evolution

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n25Europe
In Europe, MMC is pursuing sales growth initiatives in accordance with the degree of maturity of the markets ofWestern Europe, Central Europe, Russia and the Ukraine. Mitsubishi vehicles have won high marks in European markets for their attractiveness and performance and for MMC’s strong track record in motor sports events such as theDakar Rally. Going forward, MMC will aggressively introduce environmentally friendly technologies and thereby
engender greater trust in the Mitsubishi Motors brand.

Overview of Fiscal Year 2007 and Outlook for Fiscal Year 2008

Additionally, MMC is steadily working to ‘build the foundations

Retail sales in the European market totaled 341,000 units in fiscal

for growth’ by implementing the proper strategies in accordance withyear 2007, rising 20.6% year on year.

the degree of maturity of the respective markets, whether in the

By country, sales volumes were down in the mature markets of
the U.K. and Germany, but volumes increased 44% in Central

mature markets of Western Europe or the growth markets of Central
Europe, Russia and the Ukraine.

European countries. This, coupled with sharp volume growth inRussia and the Ukraine, lifted retail sales higher for Europe as a

Building Appeal for the Mitsubishi Brand in Western Europe bywhole. In Russia specifically, sales in fiscal year 2007 increased

Offering Environmentally Friendly Passenger Vehicles

54% year on year to break the 100,000 unit-per-year mark. Moreo-

In Western Europe, where total demand is not expected to grow, thever, the pace of growth has been very rapid over the past four

company will reinforce its after-sales service strategy. Also, in

years, with sales volume increasingly roughly three-fold over the

response to rising environmental consciousness and the coming

period. In the Ukraine, sales were up 99% to 32,000 units in fiscal

implementation of new CO2 emissions regulations, MMC will add ayear 2007, marking the second straight year that sales have dou-

low-emission stop-start (idling-stop) engine model to the Colt series.

bled. Furthermore, MMC vehicles have been the top-selling for-

The Colt series is produced at NedCar in the Netherlands. Addi-

eign brand in the Ukraine for four consecutive years (calendar

tionally, 2009 will see the launch of models with next-generation

years 2005 through 2007).

clean diesel engines, which MMC is currently developing jointly

The Lancer model, launched in 2007, has received the Car ofwith Mitsubishi Heavy Industries, Ltd. Preparations are also being

the Year Award in Russia three times. The Thai-built one-ton

made for the full-scale launch of electric vehicles. With these efforts,

pickup truck L200 and our SUV lineup, which was reinforced by

we are promoting the deployment of technologies that boost fuelthe successive rollout of the new Outlander and the new Pajero,economy and respond to environmental issues, thereby making thealso contributed greatly to higher sales volume in Europe.

Mitsubishi brand more synonymous with eco-friendly vehicles.

As a result, in fiscal year 2007, sales in Europe increased 40.6%
year on year to ¥931.6 billion and operating income rose 87.1% to¥79.7 billion.
In fiscal year 2008, MMC is targeting European retail sales of 388,000 units, or a gain of
13.8% year on year. This target is based on expectations of continued strong sales growth centeredon Russia and the Ukraine.

Initiatives Under the New Mid-term
Business Plan
In fiscal year 2008, MMC is working to strengthen
the new Lancer series in each European market.
Following the start of full-scale sales of the Lancer
sedan from spring, MMC will introduce the Lancer

Sportback and Lancer Evolution in autumn.
Pajero26

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

Step Up 2010 Regional Strategies

1. Western/Central Europe
Expand sales and respondto environmental regulations through the launchof new vehicles

Strengthen Lineup of New Lancer Seriess New Lancer Evolution (September 2008)s Lancer Sportback (September 2008)

2. Russia, Ukraine
Strengthen foundation byintroducing new models andexpanding sales network

Bolster Model Lineup through theIntroduction of New Vehicles

Western Europes Launch low CO2 emissions model of the Colt (engine
with idling stop mode)

Central Europes Expand sales of SUV models

Transfer Production to and Boost Capacity Utilization of the Netherlands Plants Outlander for the European market(shift production from the Okazaki Plant)s SUVs supplied to PSA Peugeot Citroën (shift production
from the Mizushima Plant)

Expansion of Sales Networks Strengthen and expand sales of the mainstay Lancer seriess Russia: from 106 outlets (CY2007) to 142 outlets (CY2010)s Ukraine: from 51 outlets (CY2007) to 85 outlets (CY2010)

Lancer Evolution (August 2008)
Lancer Sportback (September 2008)s Launch of new SUV Pajero Sport (October 2008)

Production of Outlander for the European Market at NedCar
In the various nations of Central Europe, where total demand is

Net Sales(FY)(¥ billion)

steadily expanding, we are implementing sales initiatives based on

08

940.0 (Forecast)

growth strategies. In conjunction with the full rollout of models

07

931.6

already launched in Western Europe, centered on MMC’s historically successful SUV models, we are working to increase sales by
supporting the reinforcement and expansion of sales networks.

662.8

06

586.2

05

Moreover, to boost capacity utilization, we are transferring production of (1) the Outlander for the European market from the
Okazaki Plant and (2) SUVs supplied to PSA Peugeot Citroën
from the Mizushima Plant to NedCar.
MMC Concludes Joint Venture Agreement With PSA Peugeot

Operating Income
(FY)

08

(¥ billion)

27.0 (Forecast)

07

Citroën on New Plant in Russia

06

In May 2008, MMC concluded a joint venture agreement with

05

79.7
42.6
24.4

PSA Peugeot Citroën for local production of vehicles, which enjoy
import tax advantages. MMC and PSA Peugeot Citroën are working together with a view to starting production in 2011.

Retail Sales(FY)

Bolstering Sales in Russia and the Ukraine

08

In Russia and the Ukraine, we aim to boost sales through lineup

07

enhancements, including the introduction of the new Pajero Sport

06(Thousand units)

388 (Forecast)
341
282

SUV. To this end, we plan to increase the number of sales bases in
Russia from 106 (as of end-CY2007) to 142 by the end of 2010. In

05

267

the Ukraine, we are targeting an increase from 51 bases to 85 bases
over the same timeframe.

Lancer Sportback
a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n27Asia, ASEAN and Other Regions
MMC continues to ambitiously pursue business activities in the Asia and ASEAN regions, where it was an early
entrant and has a long history. Along with engendering strong trust in these markets, MMC has established a uniquepresence centered on its strong range of SUVs in Latin America, the Middle East, Africa and Australia. The new midTERM BUSINESS PLAN 3TEP 5P  POSITIONS THE MARKETS OF ,ATIN !MERICA THE -IDDLE %AST "RAZIL #HINA AND )NDIA
which offer strong growth prospects, as key markets and calls for further penetration of the Mitsubishi Motors brandin each region. In addition, the company is entering new markets as part of a sustained effort to ‘build the foundations for growth.’

Overview of Fiscal Year 2007 and Outlook for Fiscal Year 2008

Initiatives Under the New Mid-term Business Plan

In the past fiscal year, retail sales volume in Asia, ASEAN andIn fiscal year 2008, the first year of the new mid-term businessother regions increased 17.1% year on year to 628,000 units.

plan Step Up 2010, MMC is steadily accelerating efforts to ‘build

Retail sales volume in Latin America, the Middle East and Africa

the foundations for growth’ while bolstering sales capabilities inrose 55,000 units on brisk sales of the Triton pickup truck and SUVs,

key markets. MMC will work to broaden its presence by imple-

including the Pajero. In the ASEAN region, retail sales volume rose

menting initiatives in various fields, including production, sales

22,000 units, reflecting a recovery in the Indonesian market andand alliances, in each region.

year-on-year increases in key nations, including Thailand, thePhilippines, and Malaysia. Retail sales in Australia and New ZealandChinarose 9,000 units on brisk sales of imported built-up vehicles, while in

In China, efforts are aimed at further expansion of the imported

China sales of imported built-up SUV models were up sharply. As abuilt-up vehicle business, which makes major contributions to earn-consequence, sales in all regions exceeded prior fiscal year levels.

ings. On top of the new Pajero, launched in 2007, and the addition

Mitsubishi Motors (Thailand) Co., Ltd. (MMTh), a globalof a 2.4-liter model of the Outlander, plans include the introduction

production and export base for one-ton pickup trucks, surpassed
one million units in cumulative export volume in June 2007, andof three more models: Lancer Evolution, Lancer and Eclipse.
Furthermore, MMC is making progress in reinforcing the sales

achieved one million units in export volume for pickup trucks in

network for Mitsubishi Motors brand vehicles, including locally

October of the same year.

produced models. The company also plans to establish a new com-

Under these conditions, sales in fiscal year 2007 climbed 40.8%
year on year to ¥859.3 billion and operating income increasedpany in 2009 to heighten the brand image of existing Mitsubishi
Motors sales outlets and to standardize sales and service quality.

60.8% to ¥65.6 billion.
In fiscal year 2008, MMC expects sales volume in Asia,
ASEAN and other regions to decline 9% year on year to 569,000
units due to a reduction in the supply of parts sold overseas inconjunction with the end of production of models on contract
for Perusahaan Otomobil Nasional Bhd. (Proton).

Pajero28

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

Step Up 2010 Regional Strategies

1. Achieve greater
penetration of the
Mitsubishi Motors brandthrough an expanded
presence

China

Thailands Expand imported built-up vehicle businesss Strengthen local framework as global production base,including construction of a new engine plants Produce the new Pajero Sport SUV model and start exports

Launch three models—Lancer Evolution, Lancer and Eclipse
Reinforce the sales network for Mitsubishi Motors brand vehicles

Korea

India

s Make initial entrys Further strengthen presence in the SUV segment byintroducing Outlander

Korea
MMC has decided to enter the market for sales of built-up vehicles in Korea, where the imported vehicle market is experiencing

Net Sales(FY)(¥ billion)

890.0 (Forecast)08

rapid growth. Plans are to successively launch the Lancer Evolution,

Outlander and other models starting from October 2008.
Thailand

859.3

07
06

610.5

05

614.1

Having positioned Thailand as a key production base in its global
strategy, MMC has started production of a new SUV and is rollingout these vehicles globally. Additionally, a new engine plant has

Operating Income

been built on a site adjacent to MMTh’s plant in Laem Chabang,(FY)with operations commencing from April 2008.

(¥ billion)08

72.0 (Forecast)

07

India

06

65.6
40.8

In addition to introducing the new Outlander in our strong SUV
segment in autumn 2008, MMC aims to establish Mitsubishi

05

44.9

Motors as a premium brand by reinforcing our lineup of existingmodels. Moreover, the company is aggressively expanding therange of locally produced models, including a new SUV, andupgrading our sales network, particularly in major cities.

Retail Sales(FY)(Thousand units)08569 (Forecast)

07

628

06
05

537
664

Pajero Sporta n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n29Step Up 2010 Regional Strategies

2. Broaden the range ofmodels launched in
growth markets

Latin America, Middle East and Africa

Australias Expand sales through the launch of new vehicles inmarkets with strong economies

s Expand lineup of strong-selling imported built-up
vehiclesNew Pajero Sport SUV (September 2008)
Lancer Evolution in the Middle East (October 2008)s Establish centralized sales company overseeing the
Middle East (second half of FY2008)

New Lancer Evolution (July 2008)
Lancer Sportback (November 2008)s Concentrate resources on sales of imported built-up
vehiclesCover functions, including sales, marketing, parts, and service, andestablish foundation for growth

BrazilAustralia

MMC’s SUVs and pickup trucks have won strong reputations in the

MMC closed its local production facility in Australia in March

Brazilian market. Moving forward, MMC intends to heighten the2008. Looking ahead, the company will instead specialize in sales

company’s presence in the Brazilian market by introducing newof imported built-up vehicles. The new Lancer Evolution was

products and variations on existing models, with a focus on SUVs

launched in July 2008, and now the Lancer Sportback will be

and pickup trucks. Moreover, the company is addressing needs

introduced in November 2008. MMC’s goal is to expand its prod-

specific to the Brazilian market by upgrading its lineup of flex-fueluct lineup and concentrate resources on the sales of imported

vehicles (FFVs), which first went on sale in Brazil in July 2007.

built-up vehicles.

These vehicles run any combination of gasoline and (bio-) ethanol.
Middle East
MMC is combining its Dubai liaison office and consolidated parts
sales company to establish a single company that will centrally
oversee sales and marketing, as well as parts and service functions in
the Middle East. The new company is scheduled for inaugurationin the second half of fiscal year 2008. With this move, MMC will
work to comprehensively strengthen the distributors.

Triton30m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

Motor Sports

For more than 40 years, MMC has continuously embraced the challenges of various motor sports events, including
the Dakar Rally, with the aims of pushing its vehicles to the limit in pursuit of superior drivability and safety and
REALIZING hUTMOST DRIVING PLEASUREv AND hREASSURING SAFETYvKEY ELEMENTS OF THE -ITSUBISHI -OTORS CORPORATE PHIlosophy. MMC feeds back the technology and expertise derived from these activities, along with numerous victories,
into its product development and manufacturing operations in support of the development of new-generation technologies in the performance as well as environmental fields.
MMC has recently established a new corporate slogan called “Drive@earth” in order to reinforce its commitment
to providing the “utmost driving pleasure” to customers in various regions around the world, while maintaining a focus
on environmental concerns. Going forward, the Mitsubishi Motors team will play an increasingly important role than
before as an integral part of the process of developing innovative cars.
Strong Performance in the Dakar Series 2008
(Central Europe Rally)

New Competition Car Racing Lancer for the 2009
Dakar Rally

The Mitsubishi Motors team participated in the Central Europe

MMC has developed a new competition car, the Racing Lancer,

Rally, which was held in place of the Dakar Rally 2008. The

whose mission is to clinch victory in the 2009 Dakar Rally, as theDakar Rally was cancelled on short notice due to concerns about

race opens a new chapter in its history. For MMC, the Dakar Rally

course safety.

provides a unique proving ground for its powertrains and 4WD

Stéphane Peterhansel of France (Mitsubishi Pajero Evolution)transmission systems. Because MMC has decided to focus its

fought to a second place overall finish in the rally, which started oncross-country rallying activities on developing diesel engines, theApril 20 and covered approximately 2,600 kilometers over a span ofcompany has chosen to compete in the Dakar Rally using theseven days. Fellow countryman Luc Alphand of France (Mitsubishi

Lancer model (known in Japan as the Galant Fortis). The technological expertise accumulated through the firm’s cross-country rally
program will be applied to developing diesel engines, including
MMC’s new-generation clean diesel engine for production models.
Meanwhile, various 4WD systems technologies developed in a similar manner will also be carried over to production models after theirconfiguration has been optimized to the end use of each model.

Pajero Evolution) claimed an overall fourth-place finish. This performance leaves a strong impression of the collective capabilities ofthe Mitsubishi Motors team.

Racing Lancer
The Racing Lancer is a Super Production Cross-Country Rally car that has beendeveloped in compliance with the FIA’s Group T1 regulations. The modelfeatures a newly designed multi-tubular steel frame which has been
optimized using advanced CAE analysis and is powered by a 3.0-liter V6turbocharged diesel engine. The carbon-fiber bodywork of the model is basedon the Lancer Sportback, which is due to be successively released in various
European countries from the summer of 2008.

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n

31Quality--# HAS MADE CONCERTED EFFORTS TO IMPROVE QUALITY AS THE TOP PRIORITY OF THE -ITSUBISHI -OTORS 2EVITALIZATION 0LAN WHICH WAS
completed in fiscal year 2007. Additionally, the Quality Affairs Office has held meetings of the Post-market Measure Committee,
attended by the Business Ethics Committee, which is made up of external experts, as well as the CSR Promotion Office, labor
unions, and other related groups both inside and outside the company.
Through these and other measures, MMC has constructed a system that ensures transparency and guarantees that vital information is reported to top management. This system has resulted in a reduction in the number of customer complaints (as of fiscal
2007) to approximately one-third the level in fiscal 2004.

New Quality Information Management System (SQM)

Enhancing Development and Manufacturing Quality

In 2007, as part of the deployment of SQM (Strategic Quality

MMC is working to enhance quality in order to produce automo-

Management), MMC constructed a quality management systembiles that satisfy customers. For instance, we are reinforcing train-(QMS) and a warranty claim analysis system (WAS). These sys-

ing programs for engineers focused on quality engineering, Failuretems enable complaints made by customers at dealerships andMode and Effects Analysis (FMEA) and other areas; fosteringother such locations to be immediately recorded in a database andpersonnel by passing on manufacturing expertise to younger

global quality to be assessed in real time, including information

employees through manufacturing workshops; enhancing pro-about the kinds of issues that are arising as well as the parts

cesses by utilizing ISO 9001 quality management systems; andinvolved and the frequency of replacement.

ensuring reliable quality in various work stages based on our In

These systems naturally expedite post-market measures, andStage Quality Creation (ISQC) approach.

for all other responses, they also enable the latest quality data to
be shared across the entire MMC Group, from development toproduction. This reduces the time required for quality improvements and for addressing customer concerns, including appropriate
market responses.

Flow of Quality Information from Customers

C u s t o m er
CenterC u s t o m e rs

D e a l e rs
Product Quality Report
Post-market
MeasureNot Required

Receipt(Primary Inspection)

Investigation
Post-market Measure
Determination
Process

Judgment
Meeting

AuditsMonitoring by CSR
Promotion Office32

Quality
Meetings

Post-market
MeasureCommittee

Audits

Quality Committee

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

Managing
Directors’ Meeting(Decision)

Reports
Submission of
Post-market
MeasureBoard of Directors’Meeting (Reports)

Reports
Reports
and Proposals and Proposals

AuditsDaily Audits by CSR Promotion Office(Quality Audit Department)

Resolution

Reports
and Proposals
Reports

Reports
Recall Audit Meetings (Held by CSR)

Business Ethics
Committee

Committed to Product Safety

Aiming for Ever-higher Levels of Customer Satisfaction

MMC has introduced the Mitsubishi Motors Development System

In November 2005, based on the Mitsubishi Motors(MMDS), a comprehensive quality management system designed

Revitalization Plan, the company consolidated all operations

to ensure and continually enhance quality at each stage, fromregarding after-sales services into the Quality Affairs Office andproduct development to production and sales. To ensure the effec-

worked to enhance quality through measures including not only

tiveness of each quality gate, the company has adopted a three-monitoring of market information but also provision of informa-part system, consisting of the Engineering Verification Department

tion on service to sales companies. Recognizing that this moveand the Quality Administration and Audit Department within the

produced a measure of success, in April 2008 MMC consolidated

Quality Affairs Office, and product managers for each product.

after-sales service operations into the sales divisions, which are

All MMC vehicles, including those produced overseas, areclosest to the customer, to pursue business more in line with acertified through MMDS, first at the point of mass production,customer perspective. The opening of a broad channel ofthen on through the process, culminating with sales.

communication between sales and quality divisions has provided

Additionally, Step Up 2010 promotes quality management as a
key issue at parts makers who are suppliers.

a system for sales divisions to provide feedback to quality divisions in the form of information from the frontlines that cannot begleaned from WAS- and QMS-generated quantitative data, and we

Preparing for Launch of the i-MiEV New-Generation
Electric Vehicle

believe this will further enhance quality.

MMC is making steady progress with mass production develop-

MMC believes that it is essential to improve the quality of vehi-

ment work aimed at the launch of the i MiEV in 2009. The

cles leaving its plants every day, every month, and every year; wecompany is also moving forward with confirming battery quality

are committed to making that happen. There has been no

and checks aimed at the mass production of control parts unique toalteration from this course in Step Up 2010, our new mid-term

electric vehicles. The prototype vehicle is already being put

business plan initiated in April 2008. Staying true to our commit-

through fleet test runs under actual driving conditions in partner-

ment to putting compliance first, safety first, and customers first,

ship with electric power companies around Japan, and challenges

we are working to achieve even higher levels of quality.

are steadily being overcome.

MMDS (Mitsubishi Motors Development System) Start of development

Requests from
customers

Product planning

Designconcept

 Design approval

Designspecifications

Prototype
testing Market launchCompletion ofdevelopment

Qualityverification

Sales andretailing
Customers

F Product
concept

E Specification
targets

D Approval of final
specification
model

C Validation of
prototype

B Completion ofdevelopment

A Approval of volume production(Final Quality Approval Committee)

Z Follow-up forsix months
after launch

Quality Gates

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n33Corporate Governance

MMC is strengthening its corporate governance primarily by implementing compliance in practice, improving transparency throughproactive information disclosure to stakeholders, and clarifying management responsibility.

Corporate Governance Framework

The Quality Audit Dept. monitors whether the Quality Affairs

MMC employs the Statutory Auditor System pursuant to the

Office is appropriately carrying out operations related to vehicle

Japanese Companies Act. In addition to mandatory organizations

development and manufacturing based on laws and regulations inand governance systems, the company is improving its corporate

various countries. The department conducted a total of 80 audits ingovernance by adding an executive officer system and advisory

fiscal year 2007. The audit results are successively reported to top

committees.

management and to the Business Ethics Committee twice a year.

MMC’s Board of Directors is responsible for making decisions

The Internal Audit Dept. conducts regular company-wide

concerning important management issues and overseeing execu-

audits, covering areas including subsidiaries and affiliates in Japantion. In addition, the executive officer system clarifies the roles

and overseas, to verify the appropriateness and effectiveness ofand responsibilities of directors and executive officers. Managing

internal control systems including compliance and risk manage-

directors’ meetings composed of directors, executive officers, andment. The results are reported to the top management at MMC,

statutory auditors make speedy decisions in bi-weekly meetings.

its subsidiaries and affiliates.

Status of Internal Audits and Statutory Audits

corporate governance and internal controls throughout the MMC

Statutory audits of MMC and its subsidiaries are carried out bygroup both in Japan and overseas. In fiscal year 2005, it establishedattending important meetings such as the Board of Directors

internal auditing divisions at all major overseas subsidiaries. In

Meeting. Also, key internal documents and internal audit reports

fiscal year 2007, the department used the regional integration of

from groups, subsidiaries and accounting auditors are reviewed.

consolidated domestic sales companies to establish CSR divisions

The Internal Audit Dept. is actively working to strengthen

In addition to the statutory auditors, MMC has establishedat each company.

two departments within the CSR Promotion Office: the Quality

The statutory auditors, Internal Audit Dept., Quality Audit

Audit Dept. and the Internal Audit Dept. Both are indepen-

Dept., Compliance Dept. and accounting auditors regularly

dent from operating units and conduct internal audits from an

exchange information to strengthen cooperation.

objective perspective.
Corporate Governance Framework(As of March 31, 2008)
Shareholders’ Meeting

Board of Directors(13 members, of whom
2 are outside directors)

ReportAccounting Auditors
ReportAccounting Audit

Board of Statutory Auditors(5 members, of whom
3 are outside auditors)
Audit and report

Report findings andrecommendations

Audit
and
reportBusiness Revitalization
Monitoring Committee
Business Ethics Committee
Report findings andrecommendations

ChairmanPresident
Managing Directors’ Meetings(18 members)

Quality Affairs Office

Departments

Guidance
and advice
Executive Vice President(In charge of promoting
BUSINESS REVITALIZATION

Quality Audit

Internal Audit

CSR Promotion OfficeInternal
Audit

Subsidiaries and affiliates.OTE 4HE "USINESS 2EVITALIZATION -ONITORING #OMMITTEE WAS DISSOLVED ON -ARCH   FOLLOWING THE COMPLETION OF THE -ITSUBISHI -OTORS 2EVITALIZATION 0LAN THE
company’s previous mid-term business plan. As with this committee, the Executive Vice President was put in charge of the Step Up 2010 Office from April 2008.
There are 14 directors as of June 19, 2008.

34

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

Guidance From Advisory Committees

unethical organizations. With regards to ensuring the reliability of

The Business Ethics Committee is an advisory body to the Board

financial reporting pursuant to the Financial Instruments andof Directors made up of six outside experts. The committee works

Exchange Act, which came into force from fiscal year 2008, MMC

to spread an awareness of compliance, and it provides MMC direc-

is implementing company-wide measures led by the Group Con-

tors with guidance and advice from an objective perspective.

trolling & Accounting Department, Internal Audit Department,

Prior to its dissolution on March 31, 2008 following theand Risk Management Promotion Team under the leadership ofachievement of its initial aims, the Business Revitalization

the Internal Control Promotion Committee (renamed the Internal

Monitoring Committee monitored MMC’s progress against theControl Committee from fiscal year 2008).

aims of the Mitsubishi Motors Revitalization Plan. The Committee
was made up of outside experts including Chairman Tomoo Tasaku

Development of Risk Management Framework

and representatives of major shareholders (total of six members).

MMC is establishing infrastructure for company-wide risk manage-

MMC directors received advice from the Committee starting

ment systems centered on the Risk Management Promotion Teamin April 2005. The committee held a total of 31 meetings, provid-

in the Corporate Affairs Office, and is also promoting the sharing of

ing important opinions and advice from an outside perspective.

risk information within the company.

Development of Internal Control Systems

initiatives, MMC formulated the “Risk Management Rules” andBased on the “Basic Policy on the Establishment of Internal Con-

appointed a total of 19 risk management officers (as of August 31,

trol Systems,” MMC is continually working to improve and2008) to each operational group.

To promote systematic risk management and more frequent

Based on the core role of these officers, MMC is working to

upgrade systems to ensure compliance with laws and regulations
and to promote proper, effective business execution, in line withestablish and bolster its risk management systems.
In addition, to prepare for unforeseen contingencies, MMC

changes in the domestic or overseas environment, in a drive tohas developed systems that enable the rapid communication offurther strengthen corporate governance.
In April 2008, MMC augmented this Basic Policy with policies
concerning financial reporting and the elimination of criminal orinformation to directors and other key personnel, as well as a swift
and accurate response.

Internal Control Promotion Framework
Board of Directors
Managing Directors’ Meetings
I n t ern al C o n t ro l C o m m i t t ee
Secretariat

Evaluation TeamInternal controls over the reliability of financial reporting

IT-related Internal Control
Subcommittee

Company Law Subcommittee

Directors in charge of finance at domestic and overseas
subsidiaries and affiliates

Corporate General Manager
Department
Manager

Department
Manager

Department
Manager

Department
Manager

Promotion
Officer

Promotion
Officer

Promotion
Officer

Promotion
Officer

Promoter

Promoter

Promoter

PromoterBusiness unit

Business unit

Business unit

Business unit

Promotion Officers

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n35

Data Security Management
MMC recognizes that the protection of data assets (information as

Development of an Organizational Framework for Promoting
Business Ethics

well as information systems, machines, media, and equipment

In June 2004, MMC established the CSR Promotion Office toused to handle that information) is vital to fulfilling its social

ensure thorough compliance and promote a new corporate culture,

responsibility and earning the trust of stakeholders. Accordingly,

while restructuring the compliance framework. MMC has

MMC maintains a high level of data security.

strengthened the organization to ensure that awareness of compli-

In April 2006, MMC established an information security

ance spreads to each and every employee. The company appointed

policy and internal rules that conform to ISO 27001. The com-

19 compliance officers (as of fiscal year 2007) at each department,

pany also provides employee education through regular training

under the direction of the Chief Business Ethics Officer (CBEO),

sessions, e-learning and other methods, in an effort to achieve

and appointed department managers as code leaders in eachprogressive improvements.

department under the compliance officers.

Protection of Personal Information

Initiatives to Implement Compliance

MMC formulated a policy for the protection of personal infor-

In fiscal year 2007, in order to shift the focus from revitalization tomation in April 2005, and built a management framework to

the future, MMC worked to encourage voluntary activities

establish internal rules. The company also appointed a person

grounded in the workplace as well as individual initiatives, while

responsible for personal information management at eachholding training sessions and other events with the aim of sharing

department under the direction of the Personal Information

information within the group.

Officer. MMC educates staff on the subject through ongoinge-learning seminars and other programs, and makes efforts to

Awareness-raising Activities

safeguard personal information in practice.

In fiscal year 2007, MMC held training sessions on compliance led
by instructors from outside the company as part of a training pro-

Security Trade Control

gram for directors and corporate auditors, with a total of 24 full-

From the viewpoint of maintaining international peace and secu-

time directors at the executive officer level or above and statutoryrity, MMC profoundly believes in the importance of strict trade

auditors taking part.

controls to prevent the proliferation of weapons of mass destruc-

Meetings are held three times a year in each workplace attion and the excessive accumulation of conventional weapons.

which familiar business ethics problems are examined and solu-

In order to ensure the appropriate trade control, MMC hastions are discussed. These meetings provide a good opportunity toestablished an Internal Security Trade Control Standard as a man-enhance ethical awareness and improve communication throughagement regulation. In accordance with the standard and in order

discussion using actual examples.

to ensure compliance with laws and regulations regarding security

In addition to these types of discussions at each workplace,trade control the “Supervisory Committee for Security Tradecompliance measures specific to each department were formulated

Control” was established under the direction of the president, who

and implemented under the direction of compliance officers. In

acts as Chief Security Trade Control Officer. Legality of export

these and other ways, MMC worked to promote compliance withtransactions is guaranteed by a management system centered on

business ethics.

the committee.

Establishment and Dissemination of Regulations

Compliance

MMC is giving priority to its internal reporting system in order to

In order to restore society’s trust in the company and to becreate a highly transparent workplace environment that is notrecognized as an enterprise with integrity, MMC believes it isconducive to scandals and promotes their early detection as well as

essential to ensure that all staff members adopt a strong sense

self-correction. MMC has already established the Employee

of business ethics.

Counseling Office and external counseling channels throughoutside attorneys. In April 2006, in line with the enforcement of
the Whistleblower Protection Act, MMC established operational
criteria related to the internal reporting system, as well as internal
regulations, including those prohibiting the disadvantageous

36

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

treatment of whistleblowers. Furthermore, to create a framework

since fiscal 2005. In fiscal 2006, almost all companies completed

that facilitates internal reporting, MMC is endeavoring to dissemi-

the establishment of systems to ensure compliance with businessnate regulatory information within the company by holding brief-

ethics. They regularly conduct training on resolving corporate

ings, including information in the company newsletter, andethics problems and the development of precedents.

adopting other measures.

Other Initiatives

In April 2007, MMC fully revised its “Business Ethics ofMitsubishi Motors Corporation”—MMC’s corporate ethics stan-

To prevent past errors such as the regrettable recall problems

dards—to turn them into more practical guidelines for informingfrom being forgotten over time, January 10 and October 19 have

employees’ actions. The company is using opportunities such as

been designated “Safety Pledge Days,” since two fatal accidents

meetings on business ethics issues at each workplace to help

occurred on those days involving large trucks manufactured by

employees gain a full understanding of its content. At the same

Mitsubishi Fuso, a former MMC division. All employees observetime, all employees and directors have signed an oath of compli-

a moment of silence on these days, and the previously mentioned

ance with these standards. Furthermore, in January 2008, we

meetings to review business ethics problems are held aroundrevised the “Behavioral Standards of Mitsubishi Motors Corporation,”these times.

a set of guidelines for behavior that all employees must keep in

MMC reports on the status of these activities to the Businessmind at all times. We distributed these booklets to all staff mem-

Ethics Committee, which acts as an advisory body to the Board ofbers, and by making use of it on a daily basis, we aim to ensure

Directors and is made up of external experts. MMC directors

thorough compliance with business ethics.

receive objective, common-sense guidance and advice regardingthese matters.

Activities to Spread Compliance Among MMC Group Companies

In fiscal year 2008 onward, MMC will continue to further

Restoring trust in MMC requires a concerted effort by the entire

develop and promote initiatives to ensure compliance based on the

MMC Group. To this end, domestic Group companies (including

theme of “building a sustainable relationship with society.”exclusive dealers) have taken the lead in carrying out initiatives

Organizational Framework for Promoting Business Ethics
Offer opinions and recommendations

Board of Directors

Business Ethics Committee(Made up of external experts)
Chief Business Ethics Officer(CBEO)

Guidance and Advice

ChairmanPresident
Direction and Supervision
Department Managers andCorporate General Managers
Thorough Compliance with
ReportBusiness Ethics

Reportand Approval
Direction andGuidance on
Specific
Strategies

Compliance Officer
Consult
and Report

Help Line
External Attorneys

Compliance Department

Thorough Compliance with
Business Ethics

Help Line
Employee Counseling Office

General Manager Code Leader
Consult on Ethical Issues

CSR Promotion OfficeThorough Compliance with Business Ethics

Consult on Ethical Issues

Various
Consultations

Various Consultations
Employees of Affiliates and Distributors,
Temporary Employees, Former Employees

Employees

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n37Activity Report by the Business Ethics Committee

The Mitsubishi Motors Business Ethics Committee was established in June 2004 as an advisory body to the Board of Directors of
MMC. At that time, the so-called recall scandal had reignited, and MMC faced a crisis concerning the company’s survival due to aloss of consumer confidence and trust in MMC. The Business Ethics Committee was established as one of the critical steps to
RESTORE TRUST IN --# AND ENSURE ITS REVITALIZATION 4HE AIMS OF THIS COMMITTEE WHICH IS MADE UP SOLELY OF EXTERNAL EXPERTS ARE TO
conduct monitoring, guidance and consultation from the viewpoint of external oversight and common sense with respect to MMC’s
overall activities to restore trust, especially in terms of compliance. The scope of the committee’s activity is not limited tobusiness ethics but also includes matters broadly related to quality problems and corporate culture.

Review of the Committee’s Activities Since its Establishmentthat earnest and steady progress had been made, based on the

Since the committee convened its first meeting in July 2004

unwavering stance of top executives, and that the initial goals had

through to June 2008, it has held a total of 47 meetings and has

been accomplished. At the same time, the report also pointed out

considered as many as 112 issues in total. During this period, theissues and made proposals aimed at providing further support formembers of the committee have raised frank questions andMMC’s revitalization, indicating the following: “the job of restor-

expressed candid opinions regarding each of these issues from theing trust in MMC is still only half complete. It is still necessary to

standpoint of external oversight and common sense. The generalstay fully committed to activities to restore trust.”

categories of topics considered by the committee are shown below.

MMC’s initiatives in response to the report’s evaluations andA variety of issues were considered based on each topic (the fig-

proposals are explained to the committee on a case-by-case basis,ures in brackets indicate the number or frequency of these issues).

with opportunity for the committee to respond as needed. All
departments will continue to implement specific measures in the
future based on the committee’s advice.

1. Response to recall problems [23]2. Recall process reform and quality improvement initiatives [15]The committee convened 12 times during fiscal year 2007,

3. Initiatives to entrench compliance [31]considering 31 issues including the company’s response to the

4. Other initiatives, including corporate culture reforms [38]aforementioned report, a review of “Business Ethics of Mitsubishi

5. Fact-finding visits to plants and dealers [5]Motors Corporation,” and the fiscal year 2007 business ethics
compliance promotion program. Committee members attend

Overview of Activities in Fiscal Year 2007

formal committee meetings, plus the Compliance Officers Meet-On May 21, 2007, the Board of Directors of MMC received aing in July and the Quality Meeting in September. During a visit

report from the committee comprising a summary of MMC’s activ-

to the Okazaki district, the committee gained an appreciation ofities toward restoring trust in the company, as well as an evaluation

MMC’s environmental initiatives through an explanation of elec-

and proposals regarding these activities. The report generally gives

tric vehicles and test drive of the i MiEV. In addition, the commit-

high marks to MMC activities in this regard. For example, looking

tee’s views and guidance is requested on any urgent issues, whichback on the measures that MMC had taken, the report concluded

are explained to the committee on a case-by-case basis.

Members of the Business Ethics Committee
Nobuyuki Yamamoto

Kazuko Miyamoto

Konoe Kawagishi

Noboru Matsuda(Chairman)

38

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

Takahiro Fujimoto

Kazuo MuraResponsibility to Society

MMC remains committed to its valued customers and society at large by supplying safe, high-quality products and services. The
company will also work to resolve community issues voluntarily and proactively, so as to contribute to the development of a soundand sustainable society.

Corporate Citizenship Activity Policy
MMC is tackling four key themes with respect to corporate citizenship activities: Support for the next generation, Traffic safety,
Environmental preservation, and Participation in local communities. These are being promoted as MMC’s “STEP” corporate citizenshipactivities based on our corporate philosophy.
1. Support for the next generation

Supporting the education of the next generation to create aprosperous future.

2. Traffic safety

Contributing to traffic safety education and the spread of
SAFE DRIVING TO REALIZE A ZERO ACCIDENT SOCIETY

3. Environment preservation

Contributing to preservation of our precious global environment.

4. Participation in local communities#ONTRIBUTING TO THE REVITALIZATION AND DEVELOPMENT OF REGIONAL COMMUNITIESEstablishment of Corporate Citizenship Promotion Office

KidZania Tokyo is to provide children—society’s next generation

MMC has been involved in corporate citizenship activities in—with a place and opportunity to discover their dreams and goals,

various regions for some time, and in April 2008 a Corporate

and somewhere to enjoy working to realize those goals. MMC also

Citizenship Promotion Office was established within the CSR

plans to exhibit at KidZania Koshien, which is scheduled to open

Promotion Office to promote activities at the company-wide level.

in March 2009.

In June 2008, a Corporate Citizenship Activity Policy was enacted,
covering the results of the activities that have been carried out so

2. Traffic safety

far as well as the future direction.

Car School

Going forward, the company plans to establish an internal

MMC has been running a Car School since 1995 as part of its safe

promotion structure based on the Corporate Citizenship Activity

driving educational activities. Car School is a driving program in

Policy, and to gradually extend these activities to domestic andwhich the instructors think, learn and enjoy driving together withoverseas affiliates.

all the participants.

Main Activities

3. Environment preservation

1. Support for the next generation

The Pajero Forest

Mitsubishi Motors Hands-on Lesson Program

MMC named an area of mountain forest “Pajero Forest”, and we

In this program, MMC employees actually visit elementary schools

have been working to preserve and cultivate the forest while deep-and elsewhere to give lessons that enable children to enjoying learn-ening exchanges with local residents through volunteer activities.

ing by experiencing the “real thing.” The children learn about issues

The forest is situated at Hayakawa-cho, Yamanashi Prefecture, andsuch as the environment (including test rides in the i MiEV electric

covers an area of about three hectares.

vehicle) and design, with guidance from designers and modellers.
KidZania

4. Participation in local communities

MMC has been exhibiting at KidZania Tokyo since October 2006.

Factory tours

KidZania is the first facility in Japan where children can get a taste

The Okazaki Plant, Kyoto Plant, Shiga Plant, Mizushima Plant

of working life and being a full member of society. The concept ofand Pajero Manufacturing Co., Ltd. have opened up their productionlines to local elementary schools and other residents as a place forsocial study.

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n

39Environmental Activities

Through our vehicle manufacturing operations, we aim to provide the utmost driving pleasure to customers around the world, while
also maintaining a focus on environmental concerns. This philosophy is expressed by our slogan “Drive@Earth.” MMC considers
environmental conservation a key management priority. As the connection between cars, society and the environment becomes
clearer, the company is committed to helping clear a path to a new era in sustainable partnership.
--# IS DEVELOPING AND COMMERCIALIZING A RANGE OF ENVIRONMENTALLY FRIENDLY TECHNOLOGIES 4HE COMPANY ALSO ENSURES ENVIRONMENtal factors are taken into account in business operations including manufacturing and sales, and works to support society throughexternal activities.

Mitsubishi Motors Corporation Environmental Policy

Basic Guidelines
Mitsubishi Motors recognizes that protection of the global environment is a priority for humanity and as such makes thefollowing pledges:
1. Taking a global perspective, MMC is committed to harnessing all its resources to achieve continuous reductions in the environmental
impact of all its corporate activities, spanning development, procurement, production, sales, and after-sales servicing of vehicles.
2. As a good corporate citizen, MMC is committed to taking actions that protect the environment at the level of local communities
and of society as a whole.

Behavioral Standards
1. MMC will endeavor to protect the environment by forecasting and assessing the environmental impact of the company’s products
at all stages in their life cycle. Priority is given to the following areas:s 0REVENTION OF GLOBAL WARMING BY REDUCING EMISSIONS OF GREENHOUSE GASES
s 0REVENTION OF POLLUTION BY RESTRICTING EMISSIONS OF SUBSTANCES HARMFUL TO THE ENVIRONMENTs 2EDUCTION OF WASTE AND MAXIMIZING EFFICIENT USE OF RESOURCES BY PROMOTING CONSERVATION AND RECYCLING
2. MMC will endeavor to improve our environmental management practices as part of ongoing efforts to improve the environment.
3. MMC will comply with environmental regulations and agreements, and will work to protect the environment by establishingvoluntary management targets.
4. MMC will encourage our affiliates and suppliers, both in Japan and abroad, to cooperate in working to protect the environment.
5. MMC will actively disclose environment-related information and will seek the understanding of local communities and ofsociety at large.

Environmental Organization
links
Product Committee

Environmental Council

Production Committee

Technical Strategy Committee

s .AGOYA 3UBCOMMITTEE
s -IZUSHIMA 3UBCOMMITTEE
s 0OWERTRAIN 3UBCOMMITTEE
s 0-# 3UBCOMMITTEE

Chairperson: President, MMC Secretariat:
Environment & Recycling Affairs Department

Environmental Protection
Steering Team
Saving Energy Steering Team
Logistics Steering Team
(logistics improvements within plants)

links
Production Engineering Subcommittee
Product Logistics Subcommittee
Mitsubishi Motors Group Plant
Environment Liaison Council
Overseas Environmental Production
Committee

Environmental Management
Subcommittee
Environmental Management &Recycling Committee

Note: Each committee chairperson is a director.

40

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

Recycling Subcommittee
Information Disclosure Subcommittee

As of May 14, 2008

Financial Section

Contents
Financial Resultsand Discussion

42

Consolidated Balance Sheets 46

aannnnuuaal l rreep poorrtt 22000088

Consolidated Statements ofOperations

48

Consolidated Statements of
Changes in Net Assets

49

Consolidated Statements ofCash Flows

50

Notes to Consolidated
Financial Statements

51

Report of Independent
Auditors

81

m i t s u b i s h i m o t o r s c o r p o r at i o n

41Financial Results and Discussion

Operational Review

consolidated retail volume reached 1,141,000 units, an increase of

In fiscal year 2007, although the Japanese economy was buoyed by

158,000 units, or 16.0%, from the previous fiscal year. Consolidated

the strength of newly emerging economies and resource-richretail volume worldwide was 1,360,000 units, an increase of 130,000

countries such as Brazil, Russia, India and China, there was minimal

units, or 10.6% year on year.

economic expansion. This was due to turmoil in financial markets

In Japan, retail sales dropped 28,000 units, or 11.3%, year on

stemming from the sub-prime loan crisis in the United States andyear, to 219,000 units. MMC’s sales of registered vehicles rose 9.9%

drastic increases in the price of raw materials such as crude oil.

year on year due largely to the new Delica D:5 minivan, GalantDespite these challenging conditions, Mitsubishi Motors

Fortis , and Lancer Evolution X . Total market demand for registered

Corporation and its group of related companies (hereafter “MMC”

vehicles decreased 3.5% year on year. However, sales of minicars

or “the company”) were able to exceed previous fiscal-year results

declined by 20.7% compared to the previous fiscal year. Total

in all areas including sales, operating income, ordinary income andmarket demand for minicars decreased 6.8%.
In North America, the introduction of new Lancer andnet income. This was due to an increased number of units soldoutside Japan, as well as a favorable model mix and the effect of the

Outlander models helped sales to grow 8,000 units from the

yen’s depreciation in terms of average exchange rates for theprevious fiscal year (up 4.7%), to 172,000 units.
In Europe, Russia and Ukraine propped up the market, while

fiscal year.

Germany and the U.K. were down. As a result, the overall volume
was 341,000 units, up 59,000 units, or 20.6%, year on year.

Results of Operations
Retail Sales Volume

In Asia and other areas, in addition to steady growth in the

In terms of retail sales volume, retail volume in Japan decreased

Latin American, the Middle East and African regions, the increased

year on year, reflecting a contraction of 4.8% in the Japanese

import of finished vehicles in China and Australia, and increased

market. However, in overseas markets, global models such as thesales in ASEAN countries including Indonesia, where the market is

new Pajero , Outlander and Lancer models launched (regionally)

recovering, helped to raise sales. Total vehicles sold in these areas

since the second half of the previous fiscal year contributed to sales,

increased by 91,000 units, or 17.1% over the previous fiscal year, toresulting in higher retail sales volume in all regions, including North

628,000 vehicles.

America, Europe, Asia and other areas. As a result, the overseas

Retail Sales

Net Sales/Operating Margin

(FY)

07
06

(Thousand units)

1,360

(FY)

1,230
1,344

05

04

1,312

04
1,527

42

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

1.8％
0.3％

2,202.9
2,120.1
2,122.6

03■ Net Sales

2,682.1

4.0％

06

05

03

(¥ billion)

07

2,519.4■

Operating Margin

Net Sales and Income

Net income improved ¥26.0 billion from the previous fiscal year

In fiscal year 2007, consolidated net sales were ¥2,682.1 billion, an

to ¥34.7 billion. This was mainly the result of closure costs of ¥14.6

increase of ¥479.2 billion (21.8%) year on year. This increase

billion for the Australian factory and asset impairment charges ofreflected higher sales in overseas markets, the commencement of¥21.3 billion.

SUV supply for PSA Peugeot Citroën, and foreign exchange

Notes:
1. The above retail sales volume and net sales are explained in “geographicalsegment information,” which is a classification used by the company for
management accounting purposes.
2. The following is an explanation of retail sales, net sales and operating profitability as shown in the “17. Segment Information” of the notes to consolidated
financial statements.

gains. In Japan, where retail volume has declined, and in North
America, where the model mix has changed, sales dropped ¥17.5
billion and ¥20.9 billion, respectively. However, sales in Europe,and Asia and other areas rose by ¥268.8 billion and ¥248.8 billion,
respectively.
MMC attained its highest profitability ever; reported operating

Segment Analysis
Business Segment Information

income was ¥108.6 billion, a year-on-year improvement of ¥68.4

Automobiles

billion. Key factors behind this improvement were as follows: a

In fiscal year 2007, sales in the automotive business rose 23.3%

contribution of ¥54.3 billion from improving sales volumes, a more

year on year to ¥2,657.5 billion. MMC recorded operating income

profitable model mix, and ¥14.6 billion due to favorable exchangeof ¥95.8 billion, a ¥78.1 billion improvement over the previous

rate movements. The major negative factors were an increase of

fiscal year.

¥6.4 billion in cost of sales resulting from higher advertising costs for
new launches in North America, and a drop of ¥9.5 billion in

Financial Services

earnings on the U.S. sales finance business.

In fiscal year 2007, revenues from financial services decreased

Ordinary income improved ¥67.2 billion to ¥85.7 billion,
likewise reaching a new record, although non-operating losses

48.7% year on year to ¥24.6 billion, and operating income was ¥12.8
billion, down ¥9.5 billion year on year.

edged up ¥1.2 billion from the previous fiscal year, mainly due toforeign exchange losses.

Total Assets/ROA

Interest-bearing Debt

(FY)(¥ billion)

07

6.7％

06

2.3％

05

0.4％

04
03
■ Total Assets

1,609.4

07

1,778.7

06(¥ billion)

353.9
503.8

1,557.6

05447.8

1,589.3

04

476.0

2,029.0
■

(FY)

03

1,062.6

ROA

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n43Geographical Segment Information

Financial Position

Japan

Assets, Liabilities and Net Assets

As the result of an increase in export volume, sales in Japan totaled

Total assets as of March 31, 2008 were ¥1,609.4 billion, a decrease of¥2,021.5 billion, a 33.4% increase year on year and operating income¥169.3 billion from the end of fiscal year 2006. Interest-bearing debt

was ¥82.9 billion, an improvement on the ¥5.1 billion operating loss

decreased ¥149.9 billion from a year earlier to ¥353.9 billion. Totalin the previous fiscal year.

net assets increased ¥19.8 billion from a year ago to ¥328.1 billion.

North America

Cash flows

Sales in North America were ¥392.8 billion, a 7.4% decrease from

Net cash provided by operating activities totaled ¥188.3 billion,

the previous year, mainly as the result of a decrease in sales financial¥26.0 billion more than in fiscal year 2006.

assets. The operating loss totaled ¥10.6 billion, down from ¥5.5
billion in operating income in the previous fiscal year.

Net cash used in investing activities was ¥48.9 billion, ¥2.9
billion more than in the previous fiscal year.
Net cash used in financing activities totaled ¥132.6 billion,

Europe¥121.3 billion more than in the previous fiscal year.

Net sales in Europe were ¥657.2 billion, a 3.5% decrease from the

As a result, the year-end balance of cash and cash equivalents

previous year, mainly due to lower retail sales. Operating income

was ¥360.9 billion, a decrease of ¥3.4 billion from the beginning ofwas ¥20.3 billion, a decrease of 20.0% year on year.

the fiscal year.

Asia and Other Areas
As the result of an increase in retail sales, sales in Asia and otherareas were ¥565.5 billion, a 23.8% increase year on year. However,
due to an increase in cost of sales related to the closure of theAustralian factory, operating income totaled ¥15.2 billion, a decreaseof 9.1%.

Cash Flows from Operating Activities

Cash Flows from Investing Activities(FY)(¥ billion)

(FY)

07

188.3

07

−48.9

06

−46.0

162.3

06
05
04

54.4
13.7

03 −1.4

44

05 −84.804
03

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8(¥ billion)

−34.2
46.8

Business-related Risks

Effect of socioeconomic situations

Risks related to the company’s operations and financial status are

The breakdown of the above ratio for overseas sales is 15.0% foras follows:

North America, 34.7% for Europe, and 32.1% for Asia and other

Forward-looking statements are based on the judgment of theareas. There is a possibility that changes in the socioeconomic

MMC Group as of the end of fiscal year 2007.

situation in Japan or any of these regions will impact MMC results.

Leasing, financial services and sales incentives

Effect of interest rate fluctuations on borrowings

Overcapacity in the auto industry, and fierce competition, especially

The balance of MMC’s consolidated interest-bearing liabilities

price competition in the North American market, has led to thestood at ¥353.9 billion at the end of March 2008. There is anecessity of sales incentives in sales promotion efforts.

possibility that fluctuations in interest rates on borrowings resulting

The sales incentives the company uses in promotions reduce
the selling price of new vehicles. It is possible that the use offrom a change in financial market conditions in the future will
impact MMC results.

incentives will lower residual values, which will affect both residual
values in the used car market and that of vehicles returned at the

Effect of fluctuations in materials prices

end of leases. If vehicle residual values decrease, there could be a

The MMC group purchases materials and finished parts andnegative impact on future business performance. The decline incomponents from many partners. Increased demand and otherresidual values could also put downward pressure on car and leasechanges in market conditions may cause materials and components

assets held as collateral in the sales-finance unit.

prices to increase, thus raising the company’s manufacturing costs
and resulting in an impact on MMC results.

Issuance of common and preferred shares and effect onshare price

Natural and other disasters

In June and July 2004, March 2005, and January 2006 the company

The company maintains production and other facilities in many

issued several classes of convertible preferred shares. The

parts of the world. The occurrence of a major natural or otherconversion of all Class B shares, series 1 – 3 (issued July 2004), hasdisaster, such as an earthquake or typhoon, or accidents such as fire,

already been completed, but the possible conversion of the

may result in large operational halts, etc. and thus have an impact onremaining Class A & G shares to common shares in the future will

MMC results.

dilute the value of existing common shares, and thus possibly
influence the market price of common shares.

Changes in laws and regulations
MMC abides by laws and regulations regarding the environment,

Effect of foreign exchange rate fluctuations

product safety, etc. in its various markets of operation. If any laws

Overseas sales accounted for 81.8% of the consolidated sales ofand regulations were to be changed, or new rules issued, costs

MMC for the period. The company endeavors to minimize the risk

associated with implementing these changes would have an impact

involved in foreign currency receivables and payables throughon MMC results.

foreign currency derivative contracts. However, fluctuations in theforeign exchange markets still may have an impact on MMC results.

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n45Consolidated Balance Sheets
Mitsubishi Motors Corporation and Consolidated Subsidiaries
As of March 31, 2008 and 2007

AssetsIn millions of yen

In thousands of
U.S. dollars(Note 2)

2008

2007

2008

¥ 360,902¥ 364,268$ 3,602,184

174,076

195,0211,737,468

Current assets:
Cash and cash equivalents (Notes 7 and 12)
Trade notes and accounts receivable (Notes 3 and 7)
Finance receivables (Notes 3 and 7)

14,722

40,480146,942

Inventories (Note 7)

299,644

351,9912,990,765

Short-term loans receivable

113

3,277

1,135

Deferred tax assets (Note 16)

1,040

846

10,384

Prepaid expenses and other current assets (Note 7)

124,529

130,840

1,242,938

Allowance for doubtful accounts(10,897)(27,092)(108,770)

Total current assets

964,133

1,059,633

9,623,050

Property, plant and equipment, net (Notes 4 and 7)

453,453

517,464

4,525,931

Intangible assets (Note 7)

31,82538,530317,654

93,02190,138928,446

Long-term finance receivables (Notes 3 and 7)

5,580

18,87255,700Long-term loans receivable (Note 7)

11,195

13,262

111,742

Deferred tax assets (Note 16)

9,842

8,468

98,241Retained interests in securitized assets and others (Note 7)

54,90750,226

548,029

Investments and other assets:
Investments (Notes 5 and 7)

Allowance for doubtful accounts(14,551)(17,903)(145,234)

Investments and other assets, net

159,996

163,065

1,596,926¥1,609,408¥1,778,693$16,063,562

Total assets

46

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

Liabilities and net assets

In millions of yen

In thousands of
U.S. dollars(Note 2)

2008

2007

2008

Current liabilities:
Trade notes and accounts payable
Short-term borrowings (Note 7)
Current portion of long-term debt (Note 7)
Accrued expenses, accounts payable and deferred income (Note 6)
Accrued income taxes (Note 16)
Other current liabilities (Note 16)¥ 423,729
219,597
76,705
230,750
8,115
72,015¥ 451,053
215,036
137,008
250,7227,220
49,832$ 4,229,255
2,191,811
765,595
2,303,132
80,997
718,789

Total current liabilities
Long-term debt (Note 7)
Deferred tax liabilities (Note 16)
Accrued retirement benefits (Note 15)
Other non-current liabilities

1,030,913
57,60627,967103,295
61,493

1,110,874
151,806
24,259105,881
77,567

10,289,581
574,974
279,141
1,030,992
613,769

Total liabilities

1,281,275

1,470,389

12,788,458

218,796

221,296

2,183,815

438,553432,661(702,432)

436,046
432,654(740,454)

4,377,217
4,318,408(7,011,004)

Net assets:
Stockholders’ equity (Notes 8 and 19):
Preferred stock:
Authorized: 3,312,000 shares
Issued or converted:
442,593 shares in 2007
437,593 shares in 2008
Common stock:
Authorized: 9,958,285,000 shares
Issued or converted:
5,491,516,544 shares in 2007
5,537,897,840 shares in 2008
Capital surplus
Accumulated deficit
Treasury stock — 76,934 shares at March 31, 2007
Treasury stock — 80,373 shares at March 31, 2008

(14)

(13)

(142)

387,564

349,528

3,868,295

10,676
3,157

10,132
1,393

106,565
31,512(84,584)(65,272)(844,237)

Total valuation, translation adjustments and others
Minority interest(70,750)
11,318(53,746)
12,522(706,159)
112,967

Total net assets
Contingent liabilities (Note 9)

328,132

308,304

3,275,104

Total liabilities and net assets¥1,609,408¥1,778,693$16,063,562

Total stockholders’ equity
Valuation, translation adjustments and others:
Unrealized holding gain on securities
Deferred gains/losses on hedging activities
Translation adjustments

See accompanying notes to consolidated financial statements.

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n47Consolidated Statements of Operations
Mitsubishi Motors Corporation and Consolidated Subsidiaries
For the years ended March 31, 2008 and 2007

In millions of yen

In thousands of
U.S. dollars(Note 2)

2008

2007

2008

¥2,682,103
2,194,741
0¥2,202,869
1,788,897
0$26,770,169
21,905,796
0

487,361

413,972

4,864,373

378,765

373,735

3,780,468

108,596

40,237

1,083,904

9,633
20,46821,318(28,291)

8,098
20,777
7,465
3,011

96,147204,292
212,783(282,377)

48,151

23,104

480,599

Current
Deferred

10,929
1,558

7,236
5,066

109,088
15,560Minority interest

12,488952

12,303
2,055

124,648
9,502

Net sales
Cost of sales
Reversal of deferred profit on installment sales, net
Gross profit
Selling, general and administrative expenses (Note 10)
Operating income
Interest and dividend income
Interest expense
Loss on impairment of fixed assets (Note 4)
Other gain (loss), net (Notes 5 and 11)
Income before income taxes and minority interest
Income taxes (Note 16):

Net income (Note 19)
See accompanying notes to consolidated financial statements.

48

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8¥

34,710

¥

8,745

$

346,447

Consolidated Statements of Changes in Net Assets
Mitsubishi Motors Corporation and Consolidated Subsidiaries
For the years ended March 31, 2008 and 2007

In millions of yen

In thousands of
U.S. dollars(Note 2)

2008

2007

2008

¥ 221,296(2,500)¥ 221,296—$ 2,208,768(24,952)

218,796

221,296

2,183,815

436,0462,507

436,04054,352,191
25,026

438,553

436,046

4,377,217

432,6547

432,648
5

4,318,336
72

432,661

432,654

4,318,408(740,454)
34,710(749,198)
8,745(7,390,503)
346,447

3,311
—

—
(1)

33,051—(702,432)(740,454)(7,011,004)

(13)
(0)

(12)
(0)

(135)
(6)

(14)

(13)

(142)

Total stockholders’ equity

387,564

349,528

3,868,295

Valuation, translation adjustments and others
Unrealized holding gain on securities:
Balance at beginning of year
Net change

10,132
544

9,046
1,085

101,133
5,431

10,676

10,132

106,565

1,393
1,763

—
1,393

13,911
17,600

3,157

1,393

31,512

Translation adjustments:
Balance at beginning of year
Net change(65,272)(19,311)(81,142)
15,869(651,489)(192,747)

Balance at end of year
Total valuation, translation adjustments and others(84,584)(70,750)(65,272)(53,746)(844,237)(706,159)

Minority interest:
Balance at beginning of year
Net change

12,522(1,203)

12,580(58)

124,983(12,015)

11,318¥ 328,132

12,522¥ 308,304

112,967$ 3,275,104

Stockholders’ equity
Preferred stock:
Balance at beginning of year
Preferred stock issued or converted
Balance at end of year
Common stock:
Balance at beginning of year
Common stock issued or converted
Balance at end of year
Capital surplus:
Balance at beginning of year
Issuance or conversion of common and preferred stock
Balance at end of year
Accumulated deficit:
Balance at beginning of year
Net income
Effect of affiliates which theequity method was newly applied
Effect of deconsolidation of subsidiaries
Balance at end of year
Treasury stock:
Balance at beginning of year
Net change
Balance at end of year

Balance at end of year
Deferred gains/losses on hedging activities:
Balance at beginning of year
Net change
Balance at end of year

Balance at end of year
Total net assets
See accompanying notes to consolidated financial statements.

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n49Consolidated Statements of Cash Flows
Mitsubishi Motors Corporation and Consolidated Subsidiaries
For the years ended March 31, 2008 and 2007

In millions of yen

In thousands of
U.S. dollars(Note 2)

2007

2008

2008

Operating activities:
Net income
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization
Allowance for doubtful accounts, net of reversal
Accrued retirement benefits, net of reversal
Gain from affiliates accounted for by the equity method, net
Deferred income taxes
Minority interest
Loss on sales and disposal of property, plant and equipment, net
Loss on impairment of fixed assets
Gain on sales of investments in securities, net
Loss on impairment of investments in securities
Gain on liquidation of anonymous association
Early retirement expense
Change in trade notes and accounts receivable
Change in inventories
Change in finance receivables (Note 12)
Change in retained interests in securitized assets
Change in trade notes and accounts payable
Other¥ 34,710

¥

8,745

$

346,447

75,090(14,664)
2,485(4,447)
1,558
952
2,602
21,318(74)508(4,655)
10,154
5,348
52,95531,368—(24,114)(2,819)75,330(15,201)(650)(2,166)
5,066
2,055
2,003
7,465
(5,036)451(13,885)
3,073
5,618
(55,334)
58,249(1,717)
69,297
18,978749,482(146,369)
24,810(44,389)
15,5609,502
25,976
212,783(741)
5,077(46,461)
101,354
53,384
528,549
313,088—(240,686)(28,142)

Net cash provided by operating activities

188,279

162,345

1,879,227

Investing activities:
Decrease in investments in term deposits
Purchase of property, plant and equipment (Note 12)
Proceeds from sales of property, plant and equipment (Note 12)
Net decrease in investments in securities
Acquisition of capital investments in affiliates
Decrease (increase) in short-term loans receivable
Loans madeCollection of loans receivable
Proceeds from liquidation of anonymous association
Other

5,523
(86,622)
28,549
1,289
—
2,613
(1,738)
1,076
5,035(4,592)

12,085(111,594)
40,2749,294(8,750)(2,646)(68)
1,974
19,451(6,039)55,127(864,580)
284,950
12,872—
26,090(17,351)
10,74450,256(45,841)

Net cash used in investing activities(48,865)(46,017)(487,731)

Financing activities:
Increase (decrease) in short-term borrowings
Proceeds from issuance of long-term debt
Repayment or redemption of long-term debt
Dividend paid to minority interest
Other

508
4,542
(136,634)
(98)
(911)

(13,564)
68,823(66,464)
(79)
(3)

5,078
45,333(1,363,755)(984)(9,094)

Net cash used in financing activities(132,593)(11,287)(1,323,422)

Effect of exchange rate changes on cash and cash equivalents(10,186)

11,326(101,667)

Net change in cash and cash equivalents
Cash and cash equivalents at beginning of year
Change in cash and cash equivalents due to inclusion andexclusion of subsidiaries in consolidation(3,365)364,268

116,367
248,069(33,593)
3,635,778

Cash and cash equivalents at end of year (Note 12)
See accompanying notes to consolidated financial statements.

50

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

—

(167)

—

¥ 360,902¥ 364,268$ 3,602,184

Notes to Consolidated Financial Statements
Mitsubishi Motors Corporation and Consolidated Subsidiaries

1. Significant Accounting Policies(a) Going concern
The financial statements of the Mitsubishi Motors Corporation (MMC) group for the year ended March 31, 2007 included a note describing the basis on which the going concern premise had been applied due to the existence of significant doubts as to going concern. Due tothe resolution of the significant doubts as to going concern, the MMC group has not presented that note in these financial statements.
(b) Basis of preparation
MMC and its domestic consolidated subsidiaries maintain their books of account in conformity with the financial accounting standards ofJapan. Foreign subsidiaries maintain their books of account in conformity with standards in their countries of domicile.
The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles
in Japan which are different in certain respects as to the application and disclosure requirements of International Financial ReportingStandards. These financial statements have been compiled from the consolidated financial statements filed with the Financial Services
Agency as required by the Financial Instruments Law of Japan.
In addition, the notes to the consolidated financial statements include information, which is not required under generally accepted
accounting principles in Japan but is presented herein as additional information.
Certain reclassifications have been made to the prior year’s financial statements to conform to the current year’s presentation.
As permitted, amounts of less than ¥1 million have been omitted. Consequently, the totals shown in the accompanying financial
statements (both in Yen and U.S. dollars) do not necessarily agree with the sum of the individual amounts.
(c) Principles of consolidation
All significant companies over which MMC has effective control are consolidated. Significant companies over which MMC has the ability
to exercise significant influence have been accounted for by the equity method.
All significant inter-company transactions have been eliminated in consolidation.
Any differences at the date of acquisition between acquisition cost and the fair value of the net assets acquired are expensed whenincurred or are amortized over periods between 3 to 7 years.
(d) Cash and cash equivalents
All highly liquid and low risk investments with maturities of three months or less when purchased are considered to be cash equivalents.
(e) Inventories
Inventories of MMC and its domestic consolidated subsidiaries are principally stated at cost determined by the first in first out or specificidentification method. Inventories of the foreign consolidated subsidiaries are principally stated at the lower of cost or market value. Cost
is determined by the specific identification method.
(f) Investments
Investments in securities are classified either as held-to-maturity, investments in unconsolidated subsidiaries and affiliated companies, orother securities. Held-to-maturity securities are stated at their amortized cost. No investments classified as held-to-maturity were held
during the years ended March 31, 2008 and 2007. Other securities with a readily determinable market value are stated at fair value andthe cost of such securities sold is computed based on the moving average method. The difference between the acquisition cost and thecarrying value of other securities, including unrealized gains and losses, is recognized in “Unrealized holding gain on securities” in theaccompanying consolidated balance sheets. Other securities without a readily determinable market value are stated at cost determined by
the moving average method.

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n51

(g) Depreciation and amortization
Depreciation of property, plant and equipment is principally calculated by the declining balance method or the straight line method overthe estimated useful life of the respective assets. The useful lives of the assets at MMC are based on estimated life of assets and its
domestic consolidated subsidiaries are as provided for in the Corporate Tax Law.
[Additional information]
Until March 31, 2006, to determine the useful lives of fixed assets for accounting purposes, MMC used the same useful lives that areprovided for in the Corporate Tax Law. However, due to effective manufacturing integration based on the “Mitsubishi Motors
Revitalization Plan” and by reducing the number of platforms and sharing existing platforms, the estimated actual useful lives of dies,
which are classified under tooling and furniture, and their useful lives under the Corporate Tax Law are now substantially different.
Hence, from April 1, 2006, instead of the useful lives dictated by the Corporate Tax Law, estimated actual useful lives are used todetermine the useful lives of MMC’s fixed assets. As a result, operating income, ordinary income and net income for the year ended
March 31, 2007 have increased by ¥7,585 million. (The effects on the segment information are described in Note 17).
Intangible fixed assets are amortized by the straight line method primarily over their respective estimated useful lives. Software
intended for use by MMC and its domestic consolidated subsidiaries is amortized by the straight line method over a period of 5 years.
Goodwill and negative goodwill are amortized immediately or on a straight line basis over periods of 3 to 7 years depending on the periodof effectiveness estimated by each investment.
(h) Allowance for doubtful accounts
The allowance for doubtful accounts has been provided based on MMC and its consolidated subsidiaries’ historical experience withrespect to write-offs and an estimate of the amount of specific uncollectible accounts.
(i) Allowance for product warranties
The allowance for product warranty claims has been calculated based on MMC and its consolidated subsidiaries’ historical experience andestimations with respect to future costs relating to claims.
(j) Retirement benefits
Accrued retirement benefits for employees at March 31, 2008 and 2007 are calculated based on the retirement benefits obligation and thefair value of the pension plan assets estimated at year end.
Prior service cost is being amortized using the straight line method over periods of 1 to 21 years. These periods are within the estimated average remaining service years of the employees.
Actuarial gains and losses are being amortized using the straight line method over the periods of 5 to 21 years. These periods arewithin the estimated average remaining service years of the employees.
(k) Accrual for retirement benefits for directors and corporate auditors
Before the termination of the retirement benefits plan for directors and corporate auditors during the previous fiscal year, certain directors
and corporate auditors of MMC and its domestic consolidated subsidiaries had been customarily entitled to lump-sum payments under
their respective unfunded severance benefit plans subject to the stockholders’ approval. Due to the termination of the plan and partial
deduction of the provision, further provision has been no longer needed and the outstanding balance of the provision represents only aportion of benefit payments reserved before the plan’s termination.

52

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

(l) Translation of foreign currency accounts
The accounts of the consolidated foreign subsidiaries are translated into Yen as follows:a. Asset and liability items are translated at the rate of exchange in effect on March 31;
b. Components of stockholders’ equity are translated at their historical rates at acquisition or upon occurrence; andc. Revenues, expenses and cash flow items are translated at the average rate for the financial period. Translation adjustments areincluded in “Net assets”.
(m) Amounts per share of common stock
The computation of basic net income per share of common stock is based on the weighted average number of shares of common stock
outstanding during each year. Diluted net income per share of common stock is computed based on the weighted average number ofshares of common stock outstanding each year after giving effect to the dilutive potential of common stock to be issued upon the conversion of preferred stock and stock options.
(n) Leases
Non-cancelable lease transactions at MMC and its domestic consolidated subsidiaries are accounted for as operating leases regardless ofwhether such leases are classified as operating or finance leases, except that lease agreements, which stipulate the transfer of ownership ofthe leased property to the lessee, are accounted for as finance leases.
Non-cancelable lease transactions at foreign subsidiaries, except for operating leases, are capitalized.
(o) Derivative financial instruments
MMC and its consolidated subsidiaries are exposed to risks arising from fluctuations in foreign currency exchange rates and interest rates.
In order to manage those risks, MMC and its consolidated subsidiaries enter into various derivative agreements including forward foreignexchange contracts and interest rate swaps.
Forward foreign exchange contracts are utilized to manage risks arising from forecast exports of finished goods and related foreign
currency receivables. Interest rate swaps are utilized to manage interest rate risk for loans and bonds. MMC and its consolidated subsidiaries do not utilize derivatives for speculation or trading purposes.
Derivative financial instruments are recorded at fair value, excluding certain instruments described below which are recorded inaccordance with the special hedge provisions of the accounting standard.
Forward foreign exchange contracts related to forecast exports of finished goods are accounted for using deferral hedge accounting.
Deferral hedge accounting requires unrealized gains or losses to be deferred as liabilities or assets.
MMC and its consolidated subsidiaries have also developed a hedging policy to control various aspects of the derivative transactions
including authorization levels and transaction volumes. Based on this policy, within certain limits, MMC and its consolidated subsidiaries
hedge the risks arising from the changes in foreign currency exchange rates and interest rates. Forward foreign exchange contracts aredesignated to hedge the exposure to variability in expected future cash flows.
For interest rate swaps accounted for as special hedges, instead of measuring hedge effectiveness, confirmation of the conditions for
special hedge accounting is carried out.

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n

53

2. U.S. Dollar Amounts
The U.S. dollar amounts in the accompanying consolidated financial statements are included, solely for convenience, at¥100.19 = U.S.$1.00, the exchange rate prevailing on March 31, 2008. This translation should not be construed as a representation that the
Yen amounts represent or have been, or could be, converted into U.S. dollars at that or any other rate.

3. Trade Notes and Accounts Receivable, and Finance Receivables
The outstanding balances of trade notes and accounts receivable sold to others which have been deducted from the respective accounts
amounted to ¥8,000 million ($79,848 thousand) and ¥6,614 million as of March 31, 2008 and 2007, respectively. Such amounts deductedfrom finance receivables were ¥29,646 million ($295,900 thousand) and ¥27,836 million as of March 31, 2008 and 2007, respectively.

4. Property, Plant and Equipment
Accumulated depreciation of property, plant and equipment at March 31, 2008 and 2007 was ¥1,280,402 million ($12,779,745 thousand)and ¥1,282,155 million respectively.
Impairment losses were recognized in the following asset groups for the year ended March 31, 2008 and March 31, 2007:
In millions of yen

In thousands of
U.S. dollars

2008
Location

Application

AssetsImpairment loss amount

Nagasaki, Nagasaki and
Sapporo, Hokkaido andothers (49 sites)

Assets used insales operations

Land, buildings and others¥ 4,345$ 43,374

Koufu, Yamanashi andNagoya, Aichi andothers (28 sites)

Idle assets

Land, buildings and others

802

8,010

Production facilities

Machinery and equipment,
furniture and fixtures andothers16,170161,398¥21,318$212,783

Illinois, U.S.A. andSouth Australia, Australia(2 sites)

In millions of yen
2007
Location

Application

AssetsImpairment
loss amount

Shioya, Tochigi andOkaya, Nagano andothers (78 sites)

Assets used insales operations

Land, buildings and others¥6,379Niigata, Niigata andSendai, Miyagi andothers (29 sites)

Idle assets

Land, buildings and others

1,085¥7,46554m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

The groupings of assets are determined as follows:
Assets used in production are grouped either by manufacturing plants or operational sites. Assets used in sales operations are generallygrouped by operational sites. Assets leased to others and idle assets have their own asset groups.
As a result of worsening market environment and other factors, the book value of some of the assets has been adjusted downwardly torecoverable value.
The recoverable values of assets have been obtained through comparing and then taking the higher of: value in use, which is determined by estimating future cash flow with a 5% discount rate; and net realizable value, which is based on an appraisal value obtained froma professional real estate appraiser or calculated on a reasonable basis by using the estate tax valuations through land assessments andsimilar methods.
Loss on impairment of fixed assets amounted to ¥21,318 million ($212,783 thousand) and ¥7,465 million for the year ended
March 31, 2008 and 2007, respectively. Losses on land at March 31, 2008 and 2007 amounted to ¥2,948 million ($29,432 thousand)and ¥3,102 million, respectively. Losses on buildings at March 31, 2008 and 2007 amounted to ¥2,211 million ($22,068 thousand)and ¥2,340 million, respectively.
Losses on other assets at March 31, 2008 and 2007 amounted to ¥16,158 million ($161,282 thousand) and ¥2,022 million, respectively.

5. Investments
Other securities at March 31, 2008 and 2007 were as follows:
In millions of yen
2008

2007

Acquisition
cost

Carrying
amountUnrealized
gains

Unrealized(losses)Acquisition
cost

Carrying
amountUnrealized
gains

Unrealized(losses)

Other securities:
Securities withmarket value
Securities withoutmarket value¥10,730¥29,071¥18,394¥(53)¥10,682¥27,892¥17,218¥(8)

14,254

14,254——32,57732,577——

Total other securities¥24,985¥43,326¥18,394¥(53)¥43,259¥60,469¥17,218¥(8)

In thousands of U.S. dollars
2008
Acquisition
cost

Carrying
amountUnrealized
gains

Unrealized(losses)

Other securities:
Securities withmarket value
Securities withoutmarket value$107,103$290,162$183,594$(535)

142,276

142,276——

Total other securities$249,379$432,439$183,594$(535)

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n55

Proceeds from sales of other securities and the corresponding gross gains and losses that are included in other gain (loss), net in theaccompanying consolidated statements of operations for the years ended March 31, 2008 and 2007 were as follows:

Proceeds
Gross gains
Gross losses

In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

¥482
183
(0)

¥4,5012,040
157$4,8191,827(3)Significant declines in the value of securities with market value are recognized as impairment losses if the decline is not considered tobe recoverable. After the write down of the impaired amount, a new book value is established. Similarly, significant declines in the valueof securities without market value are recognized as impairment losses. Losses recognized on the impairment of securities without market
value totaled ¥45 million ($455 thousand) and ¥334 million for the years ended March 31, 2008 and 2007, respectively.
Investments in unconsolidated subsidiaries and affiliated companies, and investments in securities at March 31, 2008 and 2007 wereas follows:

Investments in unconsolidated subsidiaries andaffiliated companies
Investments in securities

In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

¥55,450
37,570¥41,894
48,244$553,450
374,996¥93,021¥90,138$928,446

In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

¥178,508
50,3201,921¥194,941
53,213
2,567$1,781,702
502,253
19,176¥230,750¥250,722$2,303,132

6. Accrued Expenses, Accounts Payable and Deferred Income
Accrued expenses, accounts payable and deferred income at March 31, 2008 and 2007 were as follows:

Accrued expenses and accounts payable
Allowance for product warranties
Deferred income

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7. Short-Term Borrowings and Long-Term Debt
Short-term borrowings at March 31, 2008 and 2007 consisted of the following:
In millions of yen

Loans, principally from banks

In thousands of
U.S. dollars

2008

2007

2008

¥219,597¥215,036$2,191,811

The weighted average interest rates on short-term borrowings at March 31, 2008 and 2007 were 4.8% and 5.6%, respectively.
Long-term debt at March 31, 2008 and 2007 consisted of the following:

Loans, principally from banks and insurance companies,
due through 2023 at interest rates averaging 4.7% in 2008
and 4.5% in 2007:
SecuredUnsecured
3.1% bonds due May 28, 2007 (issued May 28, 1997)
3.3% bonds due May 28, 2009 (issued May 28, 1997)
3.3% Euro medium-term notes due July 15, 2008
(issued July 15, 2003)
5.7% to 6.0% bonds due 2008 through 2009(issued 2005 through 2006)
1.1% bonds due September 24, 2010
(issued September 26, 2005)
Less current portion

In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

¥ 75,569
8,682—
25,600¥ 141,694
84,9308,700
25,600$ 754,258
86,660—255,514

2,000

2,000

19,962

22,26025,690222,177

200

200

1,996

134,311(76,705)

288,814(137,008)

1,340,569(765,595)¥ 57,606¥ 151,806$ 574,974(a) 3.1% bonds due May 28, 2007, 3.3% bonds due May 28, 2009, and 3.3% Euro medium-term notes due July 15, 2008 were issued by MMC.
(b) 5.7% to 6.0% bonds due 2008 through 2009 consist of notes issued by an overseas subsidiary, Mitsubishi Motors (Thailand) Company
Limited. (The balances at March 31, 2008 and March 31, 2007 were B| 7,000,000 thousand).
(c) 1.1% bonds due September 24, 2010 were issued by a domestic subsidiary, Suiryo Plastics Co., Ltd.

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n

57

The maturities of long-term debt are as follows:
In millions of yen

In thousands of
U.S. dollars

2009
2010
2011
2012
2013
Thereafter¥ 76,705
54,763
2,079
374
282
106

$ 765,595
546,597
20,757
3,733
2,822
1,062

Total

¥134,311$1,340,569

Year ending March 31,

Assets pledged as collateral for short-term borrowings, long-term debt and guarantees (excluding factory related groups of assets) at
March 31, 2008 and 2007 consisted of the following:

Trade notes and accounts receivable
Finance receivables
Inventories
Property, plant and equipment, net
Retained interests in securitized assets
Other (see (i) below)

In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

8,215
14,59459,378134,315
10,551
67,774¥ 15,845
39,15593,409182,224
9,358
79,185$¥294,829¥419,178$2,942,703¥

82,002
145,667
592,655
1,340,609
105,311
676,458(i) ¥875 million ($8,739 thousand) and ¥864 million of other current assets were pledged based on a liability in a term lease contract relating to a building with Murata Medical Services, Ltd. at March 31, 2008 and 2007, respectively. ¥46 million ($459 thousand) of investments were pledged as collateral for debt from Mizushima Eco-Works Co., Ltd at March 31, 2008.
The following groups of assets of MMC, the Okazaki factory, were pledged as collateral at March 31, 2008 and 2007, respectively.
In millions of yen

Buildings and structures
Machinery and equipment
Land
Other

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In thousands of
U.S. dollars

2008

2007

2008

¥11,215
9,304
985
820

¥11,754
5,438
985
297

$111,938
92,871
9,840
8,194¥22,326¥18,476$222,845

The following groups of assets of MMC, the Mizushima factory, were pledged as collateral for the loan from The Japan Bank forInternational Cooperation to EQUUS Leasing B.V., a counterparty of a consolidated subsidiary, Netherlands Car B.V., at March 31, 2008
and 2007, respectively. The amounts guaranteed to EQUUS were ¥12,183 million ($121,604 thousand) and ¥13,567 million at March 31,
2008 and 2007, respectively.

Buildings and structures
Machinery and equipment
Land
Other

In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

¥ 8,653
36,9642,008
1,320¥ 9,127
41,347
2,008
1,771$ 86,371
368,941
20,05013,184¥48,947¥54,255$488,547

The following groups of assets of MMC, the Kyoto factory, were pledged as collateral at March 31, 2008 and 2007, respectively.

Buildings and structures
Machinery and equipment
Land
Other

In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

¥ 6,691
12,4682,235
587¥ 6,870
11,4402,235
689$ 66,790
124,447
22,3095,868¥21,983¥21,235$219,415

The following groups of assets of MMC, the Shiga factory, were pledged as collateral at March 31, 2008 and 2007, respectively.

Buildings and structures
Machinery and equipment
Land

In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

¥ 2,853
14,966
3,859¥ 3,039
15,031
3,859$ 28,476
149,377
38,521¥21,678¥21,930$216,376

The following groups of assets of a consolidated subsidiary, Pajero Manufacturing Corporation, were pledged as collateral at March 31,
2008 and 2007, respectively.

Buildings and structures
Machinery and equipment
Land

In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

¥2,8794,002
1,540¥2,9984,314
1,540$28,740
39,95015,371¥8,422¥8,853$84,061

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n59

The following groups of assets of a consolidated subsidiary, Suiryo Plastics Co., Ltd., were pledged as collateral at March 31, 2008 and2007, respectively.

Buildings and structures
Machinery and equipment
Land

In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

¥ 994
1,210
194

¥1,0071,349
194$ 9,926
12,086
1,941¥2,399¥2,551$23,954

In millions of yen

In thousands of
U.S. dollars

The obligations secured by such collateral at March 31, 2008 and 2007 consisted of the following:

Short-term borrowings
Current portion of long-term debt
Long-term debt

2008

2007

2008

¥ 75,341
48,46627,102¥112,962
65,03476,659$ 751,983
483,748
270,509¥150,910¥254,657$1,506,242

8. Net Assets
The Corporate Law provides that an amount equal to 10% of the amount to be disbursed as a distribution of earnings should be appropriated to the legal reserve until the sum of the legal reserve and capital surplus equals at least 25% of the common stock account. MMC and
its domestic subsidiaries have provided these amounts in accordance with the Corporate Law.
MMC is authorized to issue 3,312,000 shares of convertible preferred stock that are classified as Series A, B and G (3 to 4 times ineach series), and has 437,593 shares outstanding at March 31, 2008.
The holders of each series of convertible preferred stock do not have voting rights, but the holders of Series A and G (except for
Series B) are entitled to preferred stock dividends of ¥50,000 per share each year after April 2009.
MMC also distributes residual claims to the holders of each series of convertible preferred stock by a single payment of one million
yen per share of preferred stock in order of payment.

9. Contingent Liabilities
Loan guarantees given in the ordinary course of business amounted to ¥4,699 million ($46,901 thousand) and ¥4,192 million at March 31,
2008 and 2007, respectively. Agreements similar to guarantees given in the ordinary course of business amounted to ¥2,028 million($20,250 thousand) and ¥2,626 million at March 31, 2008 and 2007, respectively.

60

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

10. Selling, General and Administrative Expenses
Selling, general and administrative expenses for the years ended March 31, 2008 and 2007 consisted of the following:
In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

Sales promotion and advertising
Freight
Bad debts expense
Salaries and wages
Pension expenses
Depreciation
Research and development
Other¥126,790
44,510—74,294
4,975
13,991
34,586
79,614¥116,584
27,596471
77,302
5,346
15,76741,32589,339$1,265,503
444,257—
741,540
49,662
139,651345,213794,638

Total¥378,765¥373,735$3,780,468

In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

193

¥ 5,202(2,602)
2,248
4,447
(731)

(2,003)—
2,166(3,073)(25,976)
22,43944,389(7,302)

11. Other Gain (Loss), Net
Other gain (loss), net for the years ended March 31, 2008 and 2007 consisted of the following:

Gain on sales of investments in securities
Loss on sales and disposal of property,
plant and equipment, net
Reversal of allowance for doubtful accounts
Gain from affiliates accounted for by the equity method, net
Early retirement expense
Cost related to the closure of the production facility ofAustralian subsidiary
Litigation expenses
Foreign exchange losses
Gain on liquidation of anonymous association
Other

¥

$

1,935

(14,641)(5,152)(9,926)
4,655(6,781)—(4,856)(1,264)
13,885(7,043)(146,136)(51,423)(99,077)
46,461(67,686)

Total¥(28,291)¥ 3,011$(282,377)

Cost related to the closure of the production facility of Australian subsidiary consists of ¥9,423 million ($94,051 thousand) of early
retirement expense, ¥4,185 million ($41,778 thousand) of vendor claims, and ¥1,032 million ($10,306 thousand) of environmental
expenses.

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n61

12. Cash Flow Information
Cash and cash equivalents at March 31, 2008 and 2007 consisted of the following:
In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

Cash and bank deposits
Time deposits with maturities of more than three months
Short-term investments maturing within three months
from the acquisition date

¥355,896(747)¥358,058(6,005)$3,552,214(7,464)

5,754

12,21557,435

Cash and cash equivalents¥360,902¥364,268$3,602,184

Interest paid less interest received and dividends received within operating activities in the consolidated statements of cash flows
for the years ended March 31, 2008 and 2007 amounted to a net expense of ¥10,480 million ($104,608 thousand) and ¥10,779 million,
respectively. Income taxes paid for the years ended March 31, 2008 and 2007 amounted to ¥9,301 million ($92,835 thousand) and¥7,881 million, respectively.
Purchases of property, plant and equipment within investing activities in the consolidated statements of cash flows for the years
ended March 31, 2008 and 2007 include payments for the acquisition of lease vehicles of ¥20,277 million ($202,393 thousand) and ¥16,799
million, respectively.
Proceeds from sales of property, plant and equipment within investing activities in the consolidated statements of cash flows for theyears ended March 31, 2008 and 2007 include proceeds from sale of lease vehicles of ¥17,435 million ($174,026 thousand) and ¥18,909
million, respectively.
Changes in finance receivables within operating activities in the consolidated statements of cash flows for the years ended March 31,
2008 and 2007 are primarily the net of payments amounting to ¥95,514 million ($953,334 thousand) and ¥161,005 million, respectively,
and proceeds from collections amounting to ¥126,882 million ($1,266,423 thousand) and ¥208,805 million, respectively.

13. Leases
As lessee
The following pro forma amounts represent acquisition costs, accumulated depreciation, impairment losses, and net book value of theleased assets as of March 31, 2008 and 2007, which would have been reflected in the consolidated balance sheet if finance lease accounting had been applied to finance lease transactions except for lease arrangements that stipulate the transfer of title of the assets to thelessee, which are accounted for as operating leases:

62

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

(a) Notional equivalent acquisition cost, accumulated depreciation, impairment losses, and related net book value of such financelease assets:
In millions of yen
2008

2007

Notional
equivalentacquisition
cost

Notional
equivalent
accumulated
depreciation

Notional
equivalent
impairment
loss

Notional
equivalent
net book
value

Notional
equivalentacquisition
cost

Notional
equivalent
accumulated
depreciation

Notional
equivalent
impairment
loss

Notional
equivalent
net bookvalue

Tools and equipment
Others¥24,659
10,167¥14,865
4,507

¥18
16

¥ 9,776
5,643¥29,960
6,011¥16,011
3,769

¥18
20

¥13,930
2,222

Total

¥34,827¥19,372¥34¥15,420¥35,972¥19,780¥38¥16,152

In thousands of U.S. dollars
2008
Notional
equivalentacquisition
cost

Notional
equivalent
accumulated
depreciation

Notional
equivalent
impairment
loss

Notional
equivalent
net bookvalue

Tools and equipment
Others$246,130
101,481$148,371
44,989$179
163$ 97,579
56,328

Total$347,612$193,360$343$153,908(b) Future minimum lease payments of such finance leases:
In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

Due within 1 year
Due after 1 year

¥ 6,103
15,289¥ 6,782
13,778$ 60,921
152,600

Total¥21,392¥20,560$213,521

The balance of the impairment provisions relating to leased assets amounted to ¥8 million ($87 thousand) and ¥23 million at March
31, 2008 and 2007, respectively.
(c) Lease payment expense, reversal of impairment provisions relating to leased assets, notional depreciation expense, notional
interest expense and, impairment loss of such finance leases:

Lease payment expense
Reversal of impairment provisions relating to leased assets
Notional depreciation expense
Notional interest expense
Impairment loss

In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

¥7,978
14
9,039
919
—

¥7,904
13
6,907
630
12

$79,634
142
90,2259,176—

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n63(d) Notional finance lease depreciation method
Notional depreciation of such finance leases is principally calculated and depreciated with no residual value by the declining-balancemethod over the lease term.
(e) Calculation of notional interest expense of finance leases
The notional interest expense of such finance leases is principally regarded as the difference between total minimum lease payments andacquisition cost, and is allocated to each period using the interest method.

As lessor
Future minimum lease payments required under operating lease transactions entered into by MMC and its consolidated subsidiaries at
March 31, 2008 and 2007 were as follows:
In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

Due within 1 year
Due after 1 year

¥ 5,337
17,377¥ 4,664
17,070$ 53,274
173,443

Total¥22,714¥21,734$226,717

Future minimum lease revenues from operating lease transactions entered into by MMC and its consolidated subsidiaries as lessor at
March 31, 2008 and 2007 were as follows:
In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

Due within 1 year
Due after 1 year

¥ 7,513
12,295¥10,825
12,307$ 74,993
122,724

Total¥19,809¥23,133$197,717

14. Derivative Financial Instruments(a) Nature of and policy for derivative transactions
MMC and its consolidated subsidiaries utilize derivative financial instruments, including forward foreign exchange contracts, cross currency swaps, interest rate swaps and interest rate options to manage their exposure to fluctuations in foreign currencies and interest rates.
MMC and its consolidated subsidiaries do not utilize derivatives for speculation or trading purposes.
(b) Risk
MMC and its consolidated subsidiaries are exposed to the risk of credit loss in the event of nonperformance by the counterparties to thederivatives, but any such loss would not be expected to be material because MMC and its consolidated subsidiaries enter into derivativetransactions only with financial institutions with high credit ratings. The notional amounts of the derivative financial instruments do notnecessarily represent the amounts exchanged by the parties and, therefore, are not a direct measure of MMC’s risk exposure in connection with derivatives.
All the transactions related to derivative financial instruments are for the purpose of hedging. MMC and its consolidated subsidiaries
do not enter into derivative contracts for which significant volatility would have any significant influence on its operations.

64m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

(c) Control
MMC does not enter into derivative contracts for trading purposes or on the anticipation of gains from short-term market movements.
Derivative transactions are appropriately pre-approved by managing directors in charge of finance group head quarters. MMC approves
derivative transactions of consolidated subsidiaries as appropriate, and in accordance with policies established for each subsidiary, which
require the appropriate approval of managing directors in charge of finance group head quarters.
Summarized below are the notional amounts and the estimated fair values (based on the prices provided by counterparty financial
institutions) of the derivative positions, other than those accounted under the special hedge provisions, at March 31, 2008 and 2007:
Forward foreign exchange contracts
In millions of yen
2008

Forward foreign exchange contracts:
Sell:
US $
Euro
£ stg
Australian $Japanese ¥OthersBuy:
Japanese ¥Notional
amount2007

Fair value

Unrealized
gain (loss)

Notional
amountFair value

Unrealized
gain (loss)¥ 9,456
37,8858,148
5,703
48,764
6,825¥ 8,846
38,2007,648
5,458
49,884
6,880

¥ 610
(315)
499
245
(1,119)(54)¥14,330
59,951——
13,880—¥13,787
57,008——13,095
—

¥ 543
2,943
—
—
785
—

171

175

3

11,63011,628¥ (130)Total(1)¥4,270In thousands of U.S. dollars
2008

Forward foreign exchange contracts:
Sell:
US $
Euro
£ stg
Australian $Japanese ¥OthersBuy:
Japanese ¥Total

Notional
amountFair value

Unrealized
gain (loss)$ 94,390
378,131
81,32956,927486,721
68,129$ 88,299
381,284
76,33954,481
497,898
68,670$ 6,090(3,153)
4,990
2,446(11,176)
(540)

1,711

1,749

37
$ (1,304)

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n65Cross currency swaps
In millions of yen
2008

Cross currency swaps:
US $
£ stg

Notional
amount¥4,206337

2007

Fair value

Unrealized
gain (loss)

Notional
amountFair value

Unrealized
gain (loss)

¥1
0

¥1
0

¥—
—

¥—
—

¥—
—

¥1

Total

¥—

In thousands of U.S. dollars
2008

Cross currency swaps:
US $
£ stg

Notional
amountFair value

Unrealized
gain (loss)$41,981
3,364

$11
0

$11
0
$12

Total

All cross currency swaps have maturities within one year.
Interest rate options
In millions of yen
2008

Interest rate options:
Buy:

Notional
amount¥17,119

Fair value

Notional
amountFair value

Unrealized
gain (loss)

¥18

¥18

¥—

¥—

¥—

¥18

Total

In thousands of U.S. dollars
2008Interest rate options:
Buy:

Notional
amountFair value

Unrealized
gain (loss)$170,870

$187

$187
$187

Total

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2007

Unrealized
gain (loss)¥—

Interest rate swaps
In millions of yen
2008

Interest rate swaps:
Pay-fixed, receive-floating

Notional
amount¥3,605

2007

Fair value

Unrealized
gain (loss)

Notional
amountFair value

Unrealized
gain (loss)

¥(62)

¥(62)

¥—

¥—

¥—

¥(62)

Total

¥—

In thousands of U.S. dollars
2008Interest rate swaps:
Pay-fixed, receive-floating

Notional
amountFair value

Unrealized
gain (loss)$35,990$(628)$(628)$(628)Total

In millions of yen
2008

Pay-fixed, receive-floating
Notional amount
Average pay-fixed rate (%)
Average receive-floating rate (%)

2007

Within 1
year

From 1year to 3

Over 3years

Within 1
year

From 1year to 3

Over 3
years

¥204
5.3
4.3

¥3,401
4.5
4.3

¥—
—
—

¥—
—
—

¥—
—
—

¥—
—
—

In thousands of U.S. dollars
2008

Pay-fixed, receive-floating
Notional amount
Average pay-fixed rate (%)
Average receive-floating rate (%)

Within 1
year

From 1year to 3

Over 3years$2,037
5.3
4.3$33,593
4.5
4.3

$—
—
—

The method to determine fair values is based on quotations obtained from financial institutions.
Derivative financial instruments, principally forward exchange contracts and interest swaps, which qualify as hedges and areaccounted for using the deferred hedge accounting method, are excluded from the above table according to the disclosure requirements.

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n67

15. Retirement Benefits
MMC and its consolidated subsidiaries have defined benefit pension plans for their employees. The plans include contributory plans inaccordance with the Welfare Pension Institute Law of Japan, tax-qualified plans, and non-contributory severance plans. Additional retirement benefits are paid in certain cases upon an employee’s retirement. Certain foreign consolidated subsidiaries have defined contribution pension plans. At March 31, 2008, MMC and its consolidated subsidiaries have 1 fund for contributory plans in accordance with the
Welfare Pension Insurance Law, and 13 funds for tax-qualified plans. MMC and its consolidated subsidiaries have 15 non-contributory
severance plans.
The funded status of multi-employer pension plans included in the above plans which are accounted for as defined contribution
schemes as of March 31, 2008 was as follows:
In millions of yen

In thousands of
U.S. dollars¥36,138
24,625
11,513$360,694
245,783
114,911Pension Plan assets
Benefit obligations under pension plan rules
Difference

The ratio of MMC and its consolidated subsidiaries’ payments to total contributions of the multi-employer plans as of March 31, 2008
was 42.7%. This ratio does not equal to the ratio of the amount actually contributed by the MMC group.
Defined Benefit Plans
The discount rates used to determine the retirement benefit obligation were 1.5% – 2.5% for MMC and its domestic consolidated
subsidiaries, 5.1% – 7.8% for its foreign consolidated subsidiaries, and 1.5% – 2.5% for MMC and its domestic consolidated subsidiaries,
4.0% – 5.8% for its foreign consolidated subsidiaries at March 31, 2008 and 2007, respectively. The rates of return on plan assets assumed
were 0.8% – 4.0% for MMC and its domestic consolidated subsidiaries, 4.9% – 8.0% for its foreign consolidated subsidiaries, and 0.8%
– 4.0% for MMC and its domestic consolidated subsidiaries, 4.0% – 8.0% for its foreign consolidated subsidiaries for the year ended March
31, 2008 and 2007, respectively.
Prior service cost is amortized using the straight line method over periods of 1 to 21 years, and 5 to 21 years for the years ended March
31, 2008 and 2007. These periods are within the estimated average remaining service years of the employees, respectively.
The amortization period for actuarial gains and losses starts from the subsequent fiscal year and actuarial gains and losses are amortized by the straight line method over the periods of 5 to 21 years for the years ended March 31, 2008 and 2007. These periods are within
the estimated average remaining service years of the employees.
Unrecognized net obligations and assets at the date of initial application are amortized within one year.
The retirement benefit obligation for MMC and its consolidated subsidiaries’ employees’ defined benefit plans at March 31, 2008 and2007 are summarized as follows:
In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

Retirement benefits obligation
Pension plan assets at fair value¥(184,183)
67,122¥(191,009)
76,310$(1,838,341)
669,955

Unfunded status
Unrecognized actuarial losses
Unrecognized prior service costs(117,060)
17,327
3,304(114,698)
11,557
2,812(1,168,385)
172,945
32,980

Net recognized retirement benefits obligation
Prepaid pension premiums(96,428)6,866(100,329)
5,552(962,460)
68,532¥(103,295)¥(105,881)$(1,030,992)

Accrued retirement benefits

Some of the consolidated subsidiaries adopt the simplified method for the calculation of retirement benefits obligation.

68

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

Pension expenses for MMC and its consolidated subsidiaries’ employees’ retirement defined benefit plans for the years ended March
31, 2008 and 2007 consisted of the following:

Service cost
Interest cost
Expected return on plan assets
Amortization of actuarial losses
Amortization of prior service costs
OthersPension expenses

In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

¥ 9,265
4,724(4,079)
2,335
692
1,871
¥14,809¥ 9,437
4,644(3,686)
2,712
66
604
¥13,778$ 92,479
47,151(40,721)
23,3096,912
18,681$147,813

In addition to the above pension expenses, additional retirement benefits of ¥10,154 million ($101,354 thousand) and ¥3,073 million
were paid and recorded as other gain (loss), net for the years ended March 31, 2008 and 2007, respectively.
Pension expenses of consolidated subsidiaries, which adopt the simplified method, are included in service cost.
Effective for the year ended March 31, 2008, Partial Amendments to Accounting Standard for Retirement Benefits (Part2) (Accounting Standards Board of Japan (ASBJ) statement No. 14, May 15, 2007) has been adopted.

16. Income Taxes
MMC and its domestic consolidated subsidiaries are subject to corporate, resident and enterprise taxes based on their taxable income.
Income taxes of the foreign consolidated subsidiaries are generally calculated based on the tax rates applicable in their countries of incorporation. The consolidated tax payment system is applied at March 31, 2008 and 2007.
The effective tax rates reflected in the accompanying consolidated statements of operations for the year ended March 31, 2008 differ
from the statutory tax rate for the following reasons:
(%)
2008

2007

Statutory income tax rate for MMC
Change in valuation allowance, effect ofusing loss carry forwards and similar items
Dividends received (exclusion from gross income)
Others40.3

40.3(13.5)
(0.1)
(0.8)

18.5
(5.7)
0.2

Income taxes as a percentage of income before income taxes
and minority interest

25.9

53.3

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n

69The significant components of deferred tax assets and liabilities as of March 31, 2008 and 2007 consisted of the following:

Deferred tax assets:
Net operating loss carry forward
Accrued retirement benefits
Allowance for doubtful accounts
Allowance for product warranties
Accounts payable—warranties
Fixed assets (incl. impairment losses)
OthersLess valuation allowance

In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

¥ 184,835
44,8997,925
19,07815,451
38,10784,725(351,833)¥ 205,940
46,02911,294
19,815
12,342
39,68674,702(362,074)$ 1,844,854
448,141
79,108
190,422
154,216
380,349
845,644(3,511,659)

Total deferred tax assets
Deferred tax liabilities:
Reserves under the Special Taxation Measures Law
Unrealized holding gain on securities
Fair value adjustments relating to land
Accelerated depreciation in overseas consolidated subsidiaries
Other

43,18947,738431,077(399)(7,166)(4,552)(28,885)(22,489)(412)(6,797)(5,047)(34,637)(16,242)(3,983)(71,527)(45,441)(288,305)(224,466)

Total deferred tax liabilities(63,492)(63,136)(633,723)

Net deferred tax liabilities¥ (20,303)¥ (15,398)$ (202,645)

Deferred tax assets and liabilities at March 31, 2008 and 2007 are included in the accompanying consolidated balance sheets as follows:
In millions of yen

In thousands of
U.S. dollars

2007

2008

2008

Current assets
Non-current assets
Current liabilities
Non-current liabilities¥ 1,040
9,842(3,219)(27,967)

¥

846
8,468
(453)
(24,259)$ 10,384
98,241(32,130)(279,141)

Net deferred tax liabilities¥(20,303)¥(15,398)$(202,645)70m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

17. Segment Information(a) Business segments
The business segment information for MMC and its consolidated subsidiaries for the years ended March 31, 2008 and 2007 is summarized
as follows:
In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

Net sales:
Automobiles
Financial services¥2,657,457
24,590¥2,154,672
47,947$26,524,182
245,434

Total
Intersegment

2,682,047
55

2,202,619
249

26,769,616
553¥2,682,103¥2,202,869$26,770,169

¥

¥

$

Consolidated
Operating income (loss):
Automobiles
Financial services

95,777
12,763
108,540
55

Total
Intersegment

17,682
22,305955,957
127,394

39,987249

1,083,351
553

Consolidated¥ 108,596¥

40,237$ 1,083,904

Total assets:
Automobiles
Financial services¥1,530,259
63,484¥1,674,897
110,818$15,273,574
633,643

1,593,744
15,664

1,785,715(7,022)

15,907,217
156,345¥1,609,408¥1,778,693$16,063,562

Depreciation:
Automobiles
Financial services¥

69,377
5,493¥

68,215
6,820$

692,463
54,828

Consolidated¥

74,871¥75,035$747,291

Impairment loss:
Automobiles
Financial services¥

18,386
2,932

¥

7,465
—

$

183,518
29,265

Consolidated¥

21,318

¥

7,465

$

212,783

Capital expenditures:
Automobiles
Financial services¥

68,732
21,335¥98,05814,176$

686,026
212,951

Consolidated¥

90,068¥ 112,235$

898,978

Total
Corporate and eliminations
Consolidated

Notes: 1. Segments are divided by sector and by market.
2. Major products by business segment
Automobiles . . . . . . . . . . Passenger cars
Financial services . . . . . . . Sales-finance products
3. Changes in useful lives of fixed assets
As described in additional information in Note 1, Significant Accounting Policies, from the previous year, instead of the useful lives dictated by the Corporate Tax
Law, estimated actual useful lives are used to determine useful lives of MMC’s fixed assets. As a result, operating income of the automobiles segment increased by¥7,585 million for the year ended March 31, 2007.

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n71

(b) Geographical segments
The geographical segment information for MMC and its consolidated subsidiaries for the years ended March 31, 2008 and 2007 is summarized as follows:
In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

Net sales:
Japan
North America
EuropeAsia
Other areas¥2,021,524
392,765
657,169
358,339
207,172¥1,515,221
423,941
681,155
292,885
164,087$20,176,911
3,920,204
6,559,231
3,576,594
2,067,798

TotalInterarea

3,636,971(954,867)

3,077,292(874,423)

36,300,739(9,530,569)¥2,682,103¥2,202,869$26,770,169

¥

¥

$

Consolidated
Operating income (loss):Japan
North America
EuropeAsia
Other areas
Total
Interarea

82,891(10,586)
20,25519,894(4,711)
107,743853(5,136)
5,466
25,327
20,260(3,562)

827,341(105,668)
202,175
198,564(47,023)

42,355(2,117)

1,075,388
8,515

Consolidated¥ 108,596¥

40,237$ 1,083,904

Total assets:
Japan
North America
EuropeAsia
Other areas¥1,203,966
221,339
212,843
218,923
101,256¥1,271,955
333,025
248,485
250,081
83,774$12,016,828
2,209,201
2,124,399
2,185,079
1,010,647

TotalInterarea

1,958,329(348,921)

2,187,321(408,627)

19,546,156(3,482,593)¥1,609,408¥1,778,693$16,063,562

Consolidated

Notes: 1. Geographical segments are classified by the region of the consolidated Mitsubishi Motors entity primarily involved in the transaction, both local sales and exports.
The figures are not classified by the region of the wholesaler or end users. National and regional groupings are by geographical proximity and mutual relevance ofbusiness activities.
2. Main countries and regions outside Japan are grouped as follows;(1) North America . . . . . . . . The United States, Puerto Rico
(2) Europe . . . . . . . . . . . . . The Netherlands(3) Asia . . . . . . . . . . . . . . . Thailand, Philippines(4) Other . . . . . . . . . . . . . . Australia, New Zealand, UAE
3. Changes in useful life of fixed assets
As described in additional information in Note 1, Significant Accounting Policies, from the previous year, instead of the useful lives dictated by Corporate Tax Law,estimated actual useful lives are used to determine useful lives of MMC’s fixed assets. As a result, operating income of Japan increased by ¥7,585 million for theyear ended March 31, 2007.

72

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

(c) Overseas sales
Overseas sales, which include export sales of MMC and its domestic consolidated subsidiaries and sales (other than exports to Japan) of
the foreign consolidated subsidiaries for the years ended March 31, 2008 and 2007 are summarized as follows:
In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

Overseas sales:
North America
EuropeAsia
Other areas¥ 402,650
931,618
242,677
616,613¥ 423,611
662,815
191,347
419,130$ 4,018,873
9,298,520
2,422,169
6,154,443

Total¥2,193,560¥1,696,905$21,894,007¥2,682,103¥2,202,869$26,770,169

Consolidated sales(%)

Overseas sales as a percentage of consolidated sales:
North America
EuropeAsia
Other areas
Total

15.0
34.7
9.1
23.0

19.2
30.1
8.7
19.0

81.8

77.0

Notes: 1. National and regional groupings are by geographical proximity and mutual relevance of business activities.
2. Main countries and regions outside Japan are grouped as follows:(1) North America . . . . . . . The United States, Puerto Rico
(2) Europe . . . . . . . . . . . . The Netherlands, Italy, Germany, Russia(3) Asia . . . . . . . . . . . . . . Thailand, Malaysia, Taiwan(4) Other . . . . . . . . . . . . . Australia, New Zealand
3. Overseas sales are classified by the region of the wholesaler or end users. The figures consist of sales outside of Japan of MMC and its consolidated subsidiaries.

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n73

18. Related Party Transactions
MMC entered into the following transactions with related parties during the years ended March 31, 2008 and 2007:
March 31, 2008

Party type:
Party name:
Address:
Capital:Business:% of voting stock held:
Concurrent board appointment:
Business relationship:
Detail of transaction:
Transaction amount:
Account title:
Balance at year end

Main stockholder
Mitsubishi Corporation
Chiyoda-Ku, Tokyo, Japan¥201,825 million
Wholesale trading
Direct 14.0
1 concurrent member,
3 permanently transferred to MMC
Sales of passenger cars and import ofmaterials for production
Sales (see (i) below)¥292,441 million($2,918,864 thousand)Accounts receivable¥24,369 million($243,227 thousand)March 31, 2008

Party type:
Party name:
Address:
Capital:Business:% of voting stock held:
Concurrent board appointment:
Business relationship:
Detail of transaction:
Transaction amount:

Account title:
Balance at year end

Subsidiary
Heart Beat Reds LLC
Chuo-Ku, Tokyo, Japan¥3 million
Holding and sales ofbeneficial interest in trust
Direct 100.0—
Investment in anonymous association(1) Proceeds from liquidation(2) Gain on liquidation(1) ¥5,000 million($49,905 thousand) (see (ii) below)(2) ¥4,659 million($46,501 thousand) (see (ii) below)——

Equity method affiliate
Jatco Ltd.
Fuji, Shizuoka, Japan¥29,935 million
Development, manufacturing and sales oftransmission and automotive parts
Direct 15.0
1 concurrent member
Purchases of auto parts
Purchase(1) ¥90,259 million($900,878 thousand) (see (iii) below)

Accounts payable¥18,796 million($187,603 thousand)(i) Sales price of products is determined based on market price and overall cost.
(ii) The proceeds in the form of liquidation dividends were from dividend distributions due to the end of anonymous associations’ operations.
(iii) The purchase price is determined based on the estimated cost, the price for current model production and market price.

74

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

March 31, 2007

Party type:
Party name:
Address:
Capital:Business:% of voting stock held:
Concurrent board appointment:
Business relationship:
Detail of transaction:
Transaction amount:
Account title:
Balance at year end

Main stockholder
Mitsubishi Corporation
Chiyoda-Ku, Tokyo, Japan¥199,228 million
Wholesale trading
Direct 14.1
1 concurrent member,2 permanently transferred to MMC
Sales of passenger cars and import ofmaterials for production(1) Proceeds from sales of stocks(see (i) below)(2) Profit from sales of stocks (see (i) below)(1) ¥2,750 million(2) ¥2,365 million——

March 31, 2007

Party type:
Party name:
Address:
Capital:Business:% of voting stock held:
Concurrent board appointment:
Business relationship:
Detail of transaction:
Transaction amount:

Account title:
Balance at year end

Subsidiary
Heart Beat Dealers LLC
Chuo-Ku, Tokyo, Japan¥3 million
Holding and sales ofbeneficial interest in trust
Direct 100.0—
Investment in anonymous association(1) Proceeds from liquidation(2) Gain on liquidation(1) ¥8,533 million(see (ii) below)(2) ¥6,880 million(see (ii) below)
Accrued income¥63 million

Subsidiary
Heart Beat Land LLC
Chuo-Ku, Tokyo, Japan¥3 million
Holding and sales ofbeneficial interest in trust
Direct 100.0—
Investment in anonymous association(1) Proceeds from liquidation(2) Gain on liquidation(1) ¥11,229 million(see (ii) below)(2) ¥7,034 million(see (ii) below)(i) Sales of stocks include the sales of an affiliated company’s stocks and sales price is determined based on contract.
(ii) The proceeds in the form of liquidation dividends were from dividend distributions due to the end of anonymous associations’ operations.

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n75

19. Income and Equity Per Share
Net income and equity per share of common stock for the years ended March 31, 2008 and 2007 are summarized as follows:

Net income per share of common stock
Basic
DilutedStockholders’ equity per share of common stock

In yenIn U.S. dollars

2008

2007

2008

¥ 6.303.81(21.81)¥ 1.590.96(26.73)$ 0.060.04(0.22)

The computations of net income per share of common stock for the year ended March 31, 2008 and 2007 are as follows:

Numerator for basic net income per share of common stock:
Net income
Income not available to common stockholders
Income available to common stockholders
Denominator for net income per share of common stock:
Weighted average number of shares (in thousands)
Number of dilutive potential common shares (in thousands)(Preferred stock )(Number of stock options exercised)

In millions of yen

In thousands of
U.S. dollars

2008

2007

2008

¥34,710—¥8,745—$346,447—¥34,710¥8,745$346,447

5,509,309
3,598,366(3,598,316)(50)

5,491,435
3,579,689(3,579,512)(176)

5,509,309
3,598,366(3,598,316)(50)

In numbers of stock, 975 thousand shares relating to stock options were outstanding at March 31, 2008.

20. Stock Option Plans
Information regarding subscription, size and fluctuation of stock options as of March 31, 2008 and 2007 are as follows:(1) Subscription of stock options
March 31, 2008

Date of approval by shareholders:
Grantees:
Date of issue:
Class and number ofshares granted:
Condition of settlement of rights:

Period grantees provide service inreturn for stock options:
Exercisable period:

76

June 25, 2002
5 directors, 25 executive officers and 80
employees
June 2, 2003
Common stock 1,994,000
Limited to director, executive officer,
employee of the company or its
subsidiaries at exercise date(except for those who no longer hold
above positions due to termination ofterms, retirement, or other valid reasons)
No provisions
From July 1, 2004 to June 30, 2009

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

(2) Size and fluctuation of stock options
Outstanding stock options during the year ended March 31, 2008 converted to numbers of shares are as follows.
March 31, 2008

Non-vested (number of shares):
Outstanding at the beginning of the year:
Granted during the year:
Forfeited during the year:
Vested during the year:
Outstanding at the end of the year:
Vested (number of shares):
Outstanding at the beginning of the year:
Vested during the year:
Exercised during the year:
Forfeited during the year:
Outstanding at the end of the year:
Exercise price:
Weighted-average market price at exercise date:
Fair evaluation price:

—
—
—
—
—
1,088,000—
85,00028,000975,000
¥173
¥198
—

(1) Subscription of stock options
March 31, 2007

Date of approval by shareholders:
Grantees:
Date of issue:
Class and number of shares granted:
Condition of settlement of rights:

Period grantees provide service inreturn for stock options:
Exercisable period:

June 25, 2002
5 directors, 25 executive officers and 80
employees
June 2, 2003
Common stock 1,994,000
Limited to director, executive officer,
employee of the company or its
subsidiaries at exercise date(except for those who no longer hold
above positions due to termination ofterms, retirement, or other valid reasons)
No provisions
From July 1, 2004 to June 30, 2009

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n77

(2) Size and fluctuation of stock options
Outstanding stock options during the year ended March 31, 2007 converted to numbers of shares are as follows.
March 31, 2007

Non-vested(number of shares):
Outstanding at the beginning of the year:
Granted during the year:
Forfeited during the year:
Vested during the year:
Outstanding at the end of the year:
Vested(number of shares):
Outstanding at the beginning of the year:
Vested during the year:
Exercised during the year:
Forfeited during the year:
Outstanding at the end of the year:
Exercise price:
Weighted-average market price at exercise date:
Fair evaluation price:

—
—
—
—
—
1,168,000—
64,00016,0001,088,000
¥173
¥240
—

21. Business Combinations
During the year ended March 31, 2008, in order to achieve “customer’s of satisfaction to top level of the industry and the improvement of
profit rate” and “Realization of an early stage profitability turnaround of domestic business”, MMC reorganized its consolidated subsidiaries as follows.
1. Business of the entities combined:
Sale of vehicles, etc
2. Description of business of the entities combined:
Sale of vehicles, etc
3. Legal form of business combination:
Absorption by surviving company
4. Corporate name before and after the business combinations on April 1, 2007:
April 1, 2007

Corporate name before the business combination

Corporate name after the business combination

Surviving company:

Hokkaido Mitsubishi Motors Sales Co., Ltd.

Hokkaido Mitsubishi Motors Sales Co., Ltd.

Non-surviving companies:

Sapporo Mitsubishi Motors Sales Co., Ltd.
Iwamizawa Mitsubishi Motors Sales Co., Ltd.
Sorachi Mitsubishi Motors Sales Co., Ltd.

78m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

Asahikawa Mitsubishi Motors Sales Co., Ltd.
July 1, 2007

Corporate name before the business combination

Corporate name after the business combination

Surviving company:

Fukushima Mitsubishi Motors Sales Co., Ltd.

Higashi Nihon Mitsubishi Motors Sales Co., Ltd.

Non-surviving company:

Iwate Mitsubishi Motors Sales Co., Ltd.
Gunma Chuo Mitsubishi Motors Sales Co., Ltd.
Tochigi Mitsubishi Motors Sales Co., Ltd.

Surviving company:

Tokyo Mitsubishi Motors Sales Co., Ltd.

Kanto Mitsubishi Motors Sales Co., Ltd.

Non-surviving companies:

Minami Ibaraki Mitsubishi Motors Sales Co., Ltd.
Saitama Mitsubishi Motors Sales Co., Ltd.
Kanagawa Mitsubishi Motors Sales Co., Ltd.
Kawasaki Mitsubishi Motors Sales Co., Ltd.
Yamanashi Mitsubishi Motors Sales Co., Ltd.
Matsumoto Mitsubishi Motors Sales Co., Ltd.

Surviving company:

Aichi Chuo Mitsubishi Motors Sales Co., Ltd.

Non-surviving companies:

Nagoya Mitsubishi Motors Sales Co. Ltd.

Chubu Mitsubishi Motors Sales Co., Ltd.

Gifu Mitsubishi Motors Sales Co., Ltd.
Ishikawa Mitsubishi Motors Sales Co., Ltd.
Surviving company:

Kinki Mitsubishi Motors Sales Co., Ltd.

Nishi Nihon Mitsubishi Motors Sales Co., Ltd.

Non-surviving companies:

Okayama Mitsubishi Motors Sales Co., Ltd.
Hiroshima Chuo Mitsubishi Motors Sales Co., Ltd.
Sanin Mitsubishi Motors Sales Co., Ltd.
Shin-Yamaguchi Mitsubishi Motors Sales Co., Ltd.
Ehime Mitsubishi Motors Sales Co., Ltd.
Miyazaki Chuo Mitsubishi Motors Sales Co., Ltd.
Nagasaki Mitsubishi Motors Sales Co., Ltd.
Kagoshima Chuo Mitsubishi Motors Sales Co., Ltd.

Surviving company:

Kita Kanto Mitsubishi Motors Parts Sales Co., Ltd.

Non-surviving companies:

Hokkaido Mitsubishi Motors Parts Sales Co., Ltd.

Mitsubishi Motors Parts Sales Co., Ltd.

Tohoku Mitsubishi Motors Parts Sales Co., Ltd.
Shinetsu Mitsubishi Motors Parts Sales Co., Ltd.
Kanto Mitsubishi Motors Parts Sales Co., Ltd.
Hokuriku Mitsubishi Motors Parts Sales Co., Ltd.
Chugoku Mitsubishi Motors Parts Sales Co., Ltd.,a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n79Since the entities combined are consolidated subsidiaries in the automobiles segment, these transactions are treated as transactions
under common control. Thereby the combined entities’ transactions are properly accounted for based on the appropriate book values inthe stand-alone accounts and are properly eliminated as inter-company transactions in the consolidated accounts.
Additional acquisition of subsidiaries’ shares is as follows.

Acquisition consideration (cash and deposits)
Acquisition cost

In millions of yen

In thousands of
U.S. dollars

¥920
¥920

$9,182$9,182

From additional acquisition of subsidiaries’ stocks, goodwill of ¥3 million ($29 thousand) is charged to income as incurred.
During the year ended March 31, 2007, in order to improve the efficiency of its sales network by the integration of domestic sales
companies, MMC merged its consolidated subsidiaries as follows.
1. Business of the entities combined:
Sale of vehicles, etc
2. Description of business of the entities combined:
Sale of vehicles, etc
3. Legal form of business combinations:
Absorption by surviving company
4. Corporate name before and after the business combination:
April 1, 2006

Corporate name before the business combination

Corporate name after the business combination

Surviving company:

Shimane Mitsubishi Motors Sales Co., Ltd.

Sanin Mitsubishi Motors Sales Co., Ltd.

Non-surviving company:

Nishi Tottori Mitsubishi Motors Sales Co., Ltd.
July 1, 2006

Corporate name before the business combination

Corporate name after the business combination

Surviving company:

Saitama Chuo Mitsubishi Motors Sales Co., Ltd.

Saitama Mitsubishi Motors Sales Co., Ltd.

Non-surviving company:

Saitama Mitsubishi Motors Sales Co., Ltd.

Surviving company:

Iyo Mitsubishi Motors Sales Co., Ltd.

Non-surviving companies:

Uwajima Mitsubishi Motors Sales Co., Ltd.

Ehime Mitsubishi Motors Sales Co., Ltd.

Matsuyama Mitsubishi Motors Sales Co., Ltd.

Since the entities combined are consolidated subsidiaries in the automobiles segment, their transactions are treated as transactions
under common control. Thereby the combined entities’ transactions are properly accounted for based on appropriate book values in thestand-alone accounts and are properly eliminated as inter-company transactions in the consolidated accounts. Moreover, there are no
additional acquisitions of shares from minority interests of the entities combined.

22. Subsequent Event
On May 19, 2008 the MMC group entered into a contract for a joint plant in Russia with PSA Peugeot Citroën to produce vehicles underPeugeot, Citroen, and Mitsubishi brands.
The joint plant will be constructed in Kaluga state in Russia to start production in 2011.
The annual production capacity of the plant will be 160,000 units and plans are to produce mid-range SUVs under Mitsubishi, Peugeot, andCitroen brands and mid-range models under Peugeot and Citroen brands.
The MMC group will bear 30 percent of the total 470 million Euro contribution into joint ventures. On the other hand, PSA Peugeot
Citroën will bear 70 percent of the contribution.

80

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Report of Independent Auditors

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n81Consolidated Subsidiaries and Affiliates
As of March 31, 2008

Company

Incorporated in

Hokkaido Mitsubishi Motors Sales Co., Ltd.

Japan

Higashi Nihon Mitsubishi Motors Sales Co., Ltd.

Japan

Kanto Mitsubishi Motors Sales Co., Ltd.

Japan

Chubu Mitsubishi Motors Sales Co., Ltd.

Japan

Nishi Nihon Mitsubishi Motors Sales Co., Ltd.

Japan

Mitsubishi Motors Parts Sales Co., Ltd.

Japan

Major consolidated subsidiaries

Higashi Kanto MMC Parts Sales Co., Ltd.

Japan

Shikoku MMC Parts Sales Co., Ltd.*2

Japan

Pajero Manufacturing Co., Ltd.

Japan

Mitsubishi Automotive Accessories & Products Co., Ltd.

Japan

Mitsubishi Automotive Logistics Technology Co., Ltd.

Japan

Mitsubishi Automotive Engineering Co., Ltd.

Japan

Suiryo Plastics Co., Ltd.

Japan

Mitsubishi Motors North America, Inc. (MMNA)

U.S.A.

Mitsubishi Motors R&D of America, Inc. (MRDA)

U.S.A.

Mitsubishi Motor Sales of Canada, Inc. (MMSCAN)

CanadaMitsubishi Motors Credit of America, Inc. (MMCA)

U.S.A.

Mitsubishi Motor Sales of Caribbean, Inc. (MMSC)

Puerto Rico

Mitsubishi Motors Europe B.V. (MME)

Netherlands

Mitsubishi Motor R&D of Europe GmbH (MRDE)

Germany

Mitsubishi Motor Sales Netherlands B.V.

Netherlands

Mitsubishi Motors Deutschland GmbHGermany

Mitsubishi Motors France S.A.S

FranceMitsubishi Motors Belgium nv

Belgium

MMC International Finance (Netherlands) B.V.

Netherlands

Netherlands Car B.V. (NedCar)

Netherlands

Mitsubishi Motors Australia, Ltd. (MMAL)

Australia

Mitsubishi Motors New Zealand Ltd. (MMNZ)New Zealand

Mitsubishi Motors (Thailand) Co., Ltd. (MMTH)

Thailand

MMTh Engine Co., Ltd.

ThailandMitsubishi Motors Philippines Corp. (MMPC)

Philippines

Asian Transmission Corp. (ATC)Philippines

Mitsubishi Motor Parts Sales of Gulf FZE

U.A.E.

Note: MMC has 17 other subsidiaries outside Japan in addition to the above.

Major equity method affiliates
Hakodate Mitsubishi Motors Sales Co., Ltd.*3Japan

Muroran Mitsubishi Motors Sales Co., Ltd.

Japan

Tokachi Mitsubishi Motors Sales Co., Ltd.

Japan

Ibaraki Mitsubishi Motors Sales Co., Ltd.

Japan

Meihoku Mitsubishi Motors Sales Co., Ltd.

Japan

Mie Mitsubishi Motors Sales Co., Ltd.

Japan

Kagawa Mitsubishi Motors Sales Co., Ltd.

Japan

Miyazaki Mitsubishi Motors Sales Co., Ltd.

Japan

MMC Diamond Finance Corp.

Japan

Mitsubishi Motors do Portugal S.A.

Portugal

Vina Star Motors Corporation

Vietnam

Note: MMC has 10 other affiliates outside Japan in addition to the above.

Other Associated Companies
Company

Capitalization(In millions of yen)

Mitsubishi Heavy Industries, Ltd.

265,608*1 Figures in parentheses represent indirect shares.
*2 Although MMC's equity holding is less than 50%, this affiliate is listed as a subsidiary because MMC exercises effective control over the company.
*3 Although MMC's equity holding is less than 20%, this company is listed as an affiliate because MMC exercises effective control over the company.

82

m i t s u b i s h i m o t o r s c o r p o r at i o n a n n u a l r e p o r t 2 0 0 8

Capitalization(In millions)

Business Lines

MMC Share of
Voting Rights (%)*1

JPY

100

Automobile sales

100.0

JPY

100

Automobile sales

100.0

JPY

100

Automobile sales

100.0

JPY

100

Automobile sales

100.0

JPY

100

Automobile sales

JPY

100

Automobile parts sales

100.0 (31.5)

100.0

JPY

100

Automobile parts sales

56.0 (10)

JPY

100

Automobile parts sales

50.0 (8)JPY610

Automobile and parts manufacture, sales

100.0

JPY

300

Sales of automobile accessories, air conditioners

100.0

JPY

436

Automobile inspection, maintenance, transport, storage and packaging

82.8

JPY

350

Design and testing of automobiles and parts

100.0

JPY

100

Manufacture, sales of automobile parts

100.0

USD

398.8

Automobile importing, manufacturing, sales

100.0

USD

2.0

Product development, design, testing, certification

100.0 (100.0)

USD

1.3

Automobile importing, sales

100.0 (100.0)

USD

260.0

Automobile financing, leasing

100.0 (100.0)

USD

47.5

Automobile importing, sales

EUR

1282.9EUR

0.8

Product development, design, testing, certification

100.0 (100.0)

EUR

6.8

Automobile importing, sales

100.0 (100.0)

EUR

30.0

Automobile importing, sales

100.0 (100.0)

EUR

10.0

Automobile importing, sales

100.0 (100.0)

EUR

3.0

Automobile importing, sales

100.0 (100.0)

EUR

0.1

Procurement of funds, group company financing

EUR

250.0

Manufacturing, sales of automobile and parts

AUD

1,789.9

NZD

48.0

THB

7,000.0

Automobile importing, assembly, sales

99.8

THB

20.0

Manufacturing of automobile engines

100.0 (100.0)

PHP

1,640.0

Automobile importing, assembly, sales

PHP

350.0

Manufacturing of automobile transmissions

UAD

10.0

Importing, sales of automobile parts

JPY

240

Automobile sales

16.9

JPY

100

Automobile sales

29.0 (29.0)

JPY

60

Automobile sales

35.0

JPY

30

Automobile sales

40.0

JPY

70

Automobile sales

28.6

JPY

58

Automobile sales

24.8

JPY

50

Automobile sales

23.0

JPY

60

Automobile sales

38.8

JPY

3,000

Importing, sales of automobiles and parts

100.0
100.0 (15.0)
100.0

Automobile importing, sales

100.0

Auto sales financing, leasing, rentals

16.5

Automobile importing, sales

USD

16.0

Manufacture and marketing of automobiles and parts

Shipbuilding & ocean systems development, power systems,
machinery & steel structures, aerospace, mass andmedium-lot manufactured machinery and others

100.0

Automobile importing, assembly, sales

EUR

Business Lines

100.0

Share of Voting Rights
in MMC (%)
15.7(0.5)

51.0
94.7(89.4)
100.0

47.0
50.0 (50.0)
25.0

RelationshipSupplier of partsfor MMC products

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n83Principal Plants

6

=>
/01
234

5

;<

78

Country/Region

Name

Major ProductsJapan/ Nagoya Plant–Okazaki

Outlander, Colt, Colt Plus, Grandis

0 Mizushima Plant

Lancer (Galant Fortis), i, eK Wagon, Minicab

1 Pajero Manufacturing Co., Ltd.

Pajero (Montero), Delica D:5

2 Powertrain Plant–Kyoto

Engines?

@

3 Powertrain Plant–Shiga

Engines

4 Powertrain Plant–Mizushima

Engines, transmissions

U.S.A.

5 Mitsubishi Motors North America, Inc. (MMNA)

Eclipse, Galant, Endeavor, Eclipse Spyder

Netherlands

6 Netherlands Car B.V. (NedCar)

Colt (European model)

Thailand7 Mitsubishi Motors (Thailand) Co., Ltd. (MMTh)

Triton, Pajero Sport, Lancer, Spacewagon (Grandis)

Philippines
China

8 MMTH Engine Co., Ltd. (MEC)

Engines

9 Mitsubishi Motors Philippines Corporation (MMPC)

Adventure, L300 (Delica): Asian Transmission Corporation (ATC)Transmissions; Hunan Changfeng Motor Co., Ltd. (CFA)

Pajero< South East (Fujian) Motor Co., Ltd. (SEM)

Galant, Lancer= Shenyang Aerospace Mitsubishi Motors Engine Manufacturing, Co., Ltd. (SAME)

Engines> Harbin Dongan Automotive Engine Manufacturing, Co., Ltd. (HDMC)

Engines, transmissions

Taiwan? China Motor Corporation (CMC)

Colt Plus, Galant Fortis, Grunder, Zinger

Vietnam@ Vina Star Motors Corporation (VSM)

Zinger, Grandis

84

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9:Investor Information
As of March 31, 2008

Company NameMITSUBISHI MOTORS CORPORATIONHead Office

5-33-8, Shiba, Minato-ku, Tokyo 108-8410, Japan
Telephone: +81-3-3456-1111

Established

April 22, 1970

Capital¥657,349,227,926

Number of Employees

33,202 (Consolidated)

Stock Listings

Tokyo Stock Exchange and Osaka Securities Exchange

Securities Code7211

Share Trading Unit

1,000

Number of Shares Outstanding

5,538,335,433

12,761 (Non-consolidated)

Number of Shareholders
Ty p eCOMMON SHARES

Number of

Number ofissued sharesshareholders

5,537,897,840

432,575

PREFERRED SHARESFirst Series Class A

73,000

4

Second Series Class A

25,0007

Third Series Class A

1,000

1

First Series Class G

130,000

2

Second Series Class G

168,393

3

Third Series Class G

10,2001

Fourth Series Class G

30,0001

Major Shareholders

Number of shares held
Na m e(thousands)% of total

Mitsubishi Heavy Industries, Ltd.

839,942

15.17

Mitsubishi Corporation

774,768

13.99

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

268,763

4.85

The Master Trust Bank of Japan, Ltd. (Trust account)

58,661

1.06

MLP FS Custody

48,447

0.87

Japan Trustee Services Bank, Ltd. (Trust account)

48,2960.87

Mitsubishi UFJ Trust and Banking Corporation (Trust account)

32,442

0.59

Mitsubishi UFJ Trust and Banking Corporation

32,106

0.58

Japan Trustee Services Bank, Ltd. (Trust account 4)

22,717

0.41

Trust & Custody Services Bank, Ltd. (Trust account Y）

22,1830.40

2,148,327

38.79

Total

Transfer Agent and Register

Mitsubishi UFJ Trust and Banking Corporation
1-4-5, Marunouchi, Chiyoda-ku, Tokyo, Japan(Contact)
Mitsubishi UFJ Trust and Banking Corporation Transfer Agent
7-10-11, Higashisuna, Koto-ku, Tokyo, Japan
Toll-free telephone 0120-232-711

a n n ua l r e p o rt 2 0 0 8m i t s u b i s h i m o t o r s c o r p o r at i o n

85

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ht t p : / / w w w. m i t s u b i sh i- m o t o r s.co m

P r int ed in Japan