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Mitsubishi suffers record losses as recall woes continue

Mitsubishi Motors today reported record losses in the last financial year, blaming a costly product recall after admitting it had deceived regulators on the number of defective cars sold to consumers for 30 years.

But the company, 37.3% owned by DamilerChrysler, said it would break even this year on the back of restructuring, cost-cutting and new model launches.

It reported a group net loss of £1.6 billion compared with losses of £132.4m in 1999.

Mitsubishi's reputation has taken a battering since the recall cover-up and is losing market share to domestic rivals like Toyota and Nissan.

Mitsubishi's domestic vehicle sales fell 14.5%. It reported operating losses of £419.8m from a profit of £127.8m, and pre-tax losses of £534.6m from losses of £21.6m.

The company forecast group net profits and pre-tax profits to break even this year. Mitsubishi's quality problems continue. This morning (CET) Mitsubishi Motors Corporation in Japan announced the re-call of 249,457 latest generation Space Wagon models and 49,878 Space Runner models. Production began in September 1998.

Of these vehicles, 35,437 Space Wagons and 7,237 Space Runners have been sold in Europe.

In the UK 2,808 Space Wagons - 300 of which are not yet released to the dealer network - and no Space Runners are affected. (Space Runners are not officially sold in the UK). Although no faults have been reported in Europe, the Space Wagon is being recalled world-wide because of small cracks appearing around the fuel tank mounting plates. The same fault applies to the Space Runner.

There have been no reported cases of these failures in Europe.

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