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Mitsubishi reveals extent of first quarter losses

Japan's only unprofitable auto firm unveiled first-quarter operating losses of 31.71bn yen (£156.5m) in the three months to June. Mitsubishi said the figure represented a quarter of its full-year loss forecast of 120bn yen (£59m).

A recall scandal has halved the vehicle maker’s domestic sales in the past few months.

Mitsubishi's shares closed down 3.8% on Wednesday, having plumbed a fresh record low during the day following a 12% dive on Tuesday.

Revelations that Mitsubishi and its truck division Mitsubishi Fuso had been hiding defects to prevent product recalls have cut the company's car sales in Japan by more than 50% in each of the last three months. Its future was thrown in doubt after DaimlerChrysler withdrew support for its Asian partner in April, but Mitsubishi has since brokered a $4bn (£2.2bn) rescue package.

The company is now implementing a worldwide cost cutting drive, and said last month it would lay off 1,200 workers at its only US factory later this year.

Mitsubishi's net losses deepened to 54.6bn yen (£27m), compared to 51.14bn yen (£25m) in the April-June period of 2003. A full year net loss of 230bn yen (£1.1bn) is forecast.

Source: bbc.co.uk

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