Welcome to the Daily 5 report for Wednesday, Aug. 27.
Mitsubishi Motors, like other import-reliant automakers in the U.S., thought it could compensate for U.S. tariff impacts by boosting business in other global markets.
Management was optimistic — until they began to realize other import-reliant automakers in the U.S. were doing the same thing. The result? Price wars around the world.
CEO Takao Kato said in Tokyo today that Mitsubishi had planned to counter U.S. tariffs with price increases but now must revisit that strategy amid increased pricing pressure worldwide.
The reality of rising competition and price wars in other global markets hit Mitsubishi hard as the Japanese automaker slashed its financial forecasts for the rest of its current fiscal year, which ends March 31.
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"Other carmakers are seeking to gain sales in Australia, for example, as they are unable to turn profits in the U.S., so they offer big discounts," Executive Vice President Tatsuo Nakamura said.
Under its revised outlook, Mitsubishi expects operating profit to plunge 50 percent to ¥70 billion ($484 million) in the current fiscal year, Hans Greimel wrote. It had originally envisioned a 29 percent decline to $691.5 million. Mitsubishi also gutted its net income outlook to $69.2 million compared with the previous forecast of $276.6 million.
Back in the U.S., California and its auto dealers have demonstrated they can engage in the art of compromise.
As John Huetter wrote, the Federal Trade Commission may have abandoned its sweeping CARS Rule for auto dealerships, but the nation's most populous state is poised to adopt its own version — and add a guaranteed three-day return period for some used vehicles to boot.
California New Car Dealers Association President Brian Maas said the organization has been working throughout the legislative process to secure language dealers can bear.
If a few amendments are made as expected, the association plans to switch its position on Senate Bill 766 from opposition to neutrality, he said in our story.
"It's in considerably better shape than it was when it started," Maas said.
Finally, you may have noticed that exactly 100 years ago today, on Aug. 27, 1925, Automotive News published its first newspaper. We hope you, our audience, celebrate this milestone with us.
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— Philip Nussel, online editor
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