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PRESS RELEASE

Mitsubishi Fuso rolls out roadmap to expand top position in Asia

* Market leadership in Asia maintained in FY 2002
* New strategic measures to increase international business by 20%
* Investments up 50% to 200 bn Yen by 2005 to support expansion plans
* Profit expected to increase by approx 50% in FY 2003
June 18, 2003


Tokyo, June 18, 2003 - Six months after its launch as an independent company, Mitsubishi Fuso Truck & Bus Corp. today reported strong operating results in fiscal year 2002, with expectations to increase operating profits in current fiscal year 2003 by approximately 50%. At the same time, the company presented a strategic plan that will enhance the company's premier position in Asia's commercial vehicles markets.

"In a very challenging market for trucks and buses, we managed to stay ahead of the race," Wilfried Porth, President and CEO of Mitsubishi Fuso, said. "With the company spun off from Mitsubishi Motors earlier this year, we have now established a clear roadmap for the future that will secure and increase our leading position in Asia and increase exports."

The strategic plan includes an increase of overall investments by 50% by 2005, a substantial reduction of costs and the target to increase international business by 20% to 100,000 units within five years. Mitsubishi Fuso was split off from Mitsubishi Motors Corporation in January this year, with DaimlerChrysler as the largest commercial vehicles manufacturer worldwide joining as the main investor with a 43% stake. Mitsubishi Motors continues to hold 42%, the residual 15% is held by other Mitsubishi group companies.

"We have started the new chapter of this company with a set of strategic measures in place that will keep us in a superior position", Porth said, "Based on Fuso's strong foothold in Asia, and combined with the multitude of opportunities that our shareholder DaimlerChrysler offers, we are very confident that we will stay ahead of our competition and beat the tough conditions in our markets."

In Financial Year 2002/03, market leader position confirmed

Meanwhile, Mitsubishi Fuso confirmed that in fiscal year 2002 (end of March) it continued to be number one. For the 10th consecutive year, Mitsubishi Fuso is the Japanese market leader, with a market share in trucks of 30.5% and 36% in buses. Overall. Mitsubishi Fuso sold a volume of 155,000 trucks and buses last year, an increase of 10% compared to the previous year.

In the 12 months up to end of March 2003, the company increased sales revenues to 724 bn Yen (Euro 6 bn), up 6.4% from 2001.

Mitsubishi Fuso reports operating profits of 8.6 bn Yen (Euro 72 mill), compared to 9.5 bn Yen (Euro 86 mill) a year ago. This number reflects the conservative accounting approach the company decided to take in order to provide a stable balance sheet for future expansion. The 2002 number is affected by the successful launch of the new Canter model, by provisions for bad debt resulting from the sluggish economic climate in Japan as well as, among other factors, provisions for warranty.

Mitsubishi Fuso achieved a net income of 1.5 bn Yen (Euro 13 mill), compared to 0.1 bn Yen (Euro 0.9 mill) a year ago.

"New Fuso" roadmap taking the next steps,
addressing the challenges of tomorrow


As soon as Mitsubishi Fuso was established as an independent company, the new management established a process to chart the way forward. Main objectives were to build on the successful position of Mitsubishi Fuso and benefit from the opportunities DaimlerChrysler as the world's largest commercial vehicle manufacturer presents.

"We have complementary strengths, geographically and from our products", says Takashi Usami, Chairman of Mitsubishi Fuso. "Fuso contributes its strengths in Asian markets, while adding know how with its leadership in the light segment of commercial vehicles. DaimlerChrysler is strong in Europe, Nafta and Latin America, and the world's leader in the segments over 6 tons."

In five key areas of activity, ranging across all business functions and sectors of the company, Mitsubishi Fuso has established a strategic plan that will focus and boost investments, increase exports and streamline the cost structure.

One of the first tangible results will be achieved through common and standardized components as well as more efficient purchasing practice. Mitsubishi Fuso engineers have established a landscape with DaimlerChrysler to share the best available products, thus reduce costs, time to market and also speed up technology.

Another focus is engine development where both Mitsubishi Fuso and DaimlerChrysler will benefit from modular concepts. Furthermore, production will be streamlined resulting in more efficient processes and better work share. A management development program was established with the goal to internationalize executives and implement a global mindset.

Overall, the roadmap will achieve three key objectives:
  • As profitable growth is one of the main objectives, the company targets to increase international business by 20% within the next five years.
  • Also, the alliance enables Mitsubishi Fuso to adopt an aggressive cost reduction program, with material costs to be reduced by 20% by 2005.
  • Mitsubishi Fuso will increase investment in people, processes, products and facilities to 200 bn Yen between 2003 and 2005, up 50% compared to the previous period.
"With these measures designed to deliver even better products and maintain our technology lead, we will meet the expectations of our customers", Porth, said.

Outlook for FY 2003:
Domestic sales up 22%,
operating profit to increase by approximately 50%


Mitsubishi Fuso expects the domestic market to grow from approximately 210,000 trucks and buses (2002) to 261,000 in the current year. While the bus sector is expected to grow only slightly, the demand for trucks will increase from 200,000 to 250,000 units, according to the company's estimates. This is clearly an extraordinary effect as a consequence of the "NOx" impact that drives replacement particularly in the metropolitan areas of Japan faster and steeper than anticipated. This effect is limited in time and volume, and as with the beginning, it is difficult predict an exact end. Mitsubishi Fuso is addressing this extra demand by way of interim measures like temporary workers that can be easily adjusted according to demand.

In Japan, Mitsubishi Fuso plans to sell 79,000 units this year, an increase of more than 22% over the past year. Overall, the company expects to sell 160,000 trucks and buses compared to 155,000 units last year.

With this sales plan in place, the company estimates its sales revenues to reach 790 bn Yen (Euro 6.3 bn), an improvement of 9% over last fiscal year's number.

The management expects a strong improvement in results, thanks to higher efficiencies to be achieved as a first result of the cost reduction program, as well as the favorable demand in Japan. Operating profit is expected to improve by approximately 50% to around 13 bn Yen (Euro 104 mill). Mitsubishi Fuso plans to earn a net income of around 5 bn Yen (Euro 40 mill) after 1.5 bn Yen (Euro 13 mill) last year. This substantial improvement reflects significant extraordinary burdens in fiscal year 2002, but also a better cost and trading position.

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