Press Release

Mitsubishi Motors reports Financial Results for Fiscal Year ended March 31, 1997

Tokyo, May 29,1997

Tokyo, May 29 --- Mitsubishi Motors Corporation today announced sales for the fiscal year ended March 31, 1997 of 2,585,940 million yen, an increase of 2.5% on the 2,522,559 million yen of the yen previous fiscal year. Ordinary profit was 58,035 million yen, an increase of 4.8% on the 55,393 million yen of a year ago. Net income was 15,067 million yen, a decrease of 26.4% on the 20,468 million yen of a year ago.

Domestic sales of passenger cars, trucks and buses in fiscal 1996 were 772,047 units, compared with 824,146 units for fiscal 1995. Exports of vehicles were 481,169 units, compared with 489,653 units. Total sales in the 1996 fiscal year were 1,253,216 units, compared with 1,313,799 units for the previous fiscal year.

For the 1997 fiscal year (April 1, 1997 - March 31, 1998), Mitsubishi Motors forecasts an ordinary profit of 60 billion yen and net income of 24 billion yen on sales of 2,840 billion yen. For the first half of the 1997 fiscal year (April 1, 1997 - September 30, 1997), the company forecasts an ordinary profit of 20 billion yen and net profit of 8 billion yen on sales of 1,330 billion yen.

FINANCIAL HIGHLIGHTS
(April 1, 1996 -- March 31, 1997)

	Millions of yen
	1996FY	1995FY	% Change
Sales	2,585,940	2,522,559	2.5
Operating profit	57,148	62,359	-8.4
Ordinary profit	58,035	55,393	4.8
Net income	15,067	20,468	-26.4
Earnings per share	16.36Yen	22.24Yen	---
Dividends (per share)	7.00Yen	7.00Yen	---

OVERVIEW OF 1996 FISCAL YEAR FINANCIAL RESULTS

Fiscal 1996 saw the global economy advance smoothly, with the United States' economy remaining firm, the European economy recovering, and the economies of China and the countries of South East Asia continuing to grow strongly. In Japan, the economy moved to a footing of gentle recovery, supported by growth in capital spending in the private sector and by a favorable change in the export environment with a decline in the value of the yen. The economy lacked vitality, however, owing to a sense of uncertainty about future prospects due to unease about domestic financial institutions.

In the Japanese automotive industry, the introduction of new recreational vehicle (sport utility) models and several full model changes saw fiscal 1996 domestic sales of passenger cars, light commercial vehicles and trucks outpace those of fiscal 1995. Total vehicles sales stood at 7,290,000 units, a six percent increase over the previous year. Sales of domestically produced vehicles were five percent up at 6,850,000 units. Sales of imports were nine percent up at 440,000 units. Helped by the decline in the value of the yen, exports of finished vehicles grew by six percent to 3,850,000 units.

Mitsubishi Motors has, in this market environment, made every effort to improve quality and reduce costs. Mitsubishi Motors has also introduced several distinctive and attractive new models which meet market trends and customer requirements and preferences and, always placing the customer foremost, has striven to improve its sales and service organizations. Despite these efforts, the introduction of several new models by other Japanese manufacturers means Mitsubishi Motors must report total domestic vehicle sales volume of 772,000 units, a six percent decline over fiscal 1995, and domestic registrations of 767,000 units, a five percent decline. These figures gave Mitsubishi Motors an 11.2 percent share of the fiscal 1996 domestic market, imports excluded. As to exports, despite aggressive marketing programs and with expanded production at foreign-based facilities, Mitsubishi Motors shipments to foreign markets stood at 481,000 units, two percent down on fiscal 1995. Mitsubishi Motors' combined domestic and foreign sales volume totaled 1,253,000 units, a five percent decline on fiscal 1995.

Mitsubishi Motors reported sales of 2,585.9 billion yen, an increase of three percent over fiscal 1995, stemming from the weaker Yen and other factors. Ordinary profit of 58 billion yen was five percent up over fiscal 1995, a result of the introduction of determined measures designed to improve the strength and quality of the corporate structure and to reduce costs. Having decided to accept an extraordinary valuation loss of 43.2 billion yen on its investment in Mitsubishi Motors Sales of America, Inc., the company's distribution subsidiary in the United States, Mitsubishi Motors reports a net income of 15.1 billion yen, a decline of 26 percent on fiscal 1995.

SALES FIGURES

April 96 - March 97 April 95 - March 96

Change in Total

Domestic

Export

Total

Domestic

Export

Total

SALES VOLUME

Passenger cars
(regular & small-size) 334,741 320,688 655,429 360,438 327,216 687,654 -32,225

Mini vehicles 285,355 225 285,580 324,515 156 324,671 -39,091

Trucks (below 1 ton) 28,874 110,920 139,794 27,784 116,543 144,327 -4,533

Trucks (above 1.5 ton) 117,804 47,223 165,027 106,084 44,280 150,364 14,663

Buses 5,273 2,113 7,386 5,325 1,458 6,783 603

TOTAL 772,047 481,169 1,253,216 824,146 489,653 1,313,799 -60,583

SALES AMOUNT (Millions of yen)

Vehicle sales 1,305,544 657,064 1,962,608 1,364,251 591,530 1,955,781 6,827

Parts for overseas production --- 240,110 240,110 --- 200,654 200,654 39,456

Parts & others 175,258 207,964 383,222 169,709 196,415 366,124 17,098

TOTAL 1,480,802 1,105,138 2,585,940 1,533,960 988,599 2,522,559 63,381

PROFIT AND LOSS STATEMENT

Millions of yen

1996FY

1995FY

Change

ORDINARY INCOME AND EXPENSES

Operating income and expenses

Sales 2,585,940 2,522,559 63,381

Cost of sales 2,203,247 2,192,014 11,233

Selling and administrative expenses 325,544 268,184 57,360

Operating profit 57,148 62,359 -5,211

Non-operating income and expenses

(Non-operating income) (18,827) (16,096) (2,731)

Interest and dividends income 11,520 13,374 -1,854

Other Income 7,306 2,721 4,585

(Non-operating expenses) (17,939) (23,062) (-5,123)

Interest expenses 14,014 19,221 -5,207

Other expenses 3,925 3,841 84

Ordinary profit 58,035 55,393 2,642

EXTRAORDINARY INCOME AND EXPENSES

(Extraordinary profit) (10,096) (897) (9,199)

Reversal of bad debt allowance --- 897 -897

Income from sale of securities 10,096 --- 10,096

(Extraordinary loss) (47,764) (35,822) (11,942)

Loss on disposal of fixed assets 4,585 3,214 1,371

Loss on appraisal of investments in subsidiaries 43,178 32,608 10,570

Income before income taxes 20,367 20,468 -101

Corporation and resident taxes 5,300 --- 5,300

Net income 15,067 20,468 -5,401

Retained earnings brought forward from previous period 25,560 181,788 -156,228

Interim dividends 3,223 3,221 2

Provision for legal reserve 322 322 0

Unappropriated retained earnings at end of period 37,082 198,712 -161,630

PROPOSED APPROPRIATION OF RETAINED EARNINGS

Millions of yen

1996FY

1995FY

Change

Unappropriated retained earnings at end of period 37,082 198,712 -161,630

Reversal of special depreciation reserve 14 17 -3

Reversal of overseas investments loss reverse 57 169 -112

Reversal of reserve for deferred gains of fixed assets 334 383 -49

TOTAL 37,490 199,283 -161,793

Proposed appropriation of earnings

Legal reserve 339 338 1

Dividend (3.50 per share in 1996FY and 1995FY) 3,226 3,221 5

Director & statutory auditor bonuses 172 163 9

General reserves 8,000 170,000 -162,000

Retained earnings to be carried forward to next period 25,751 25,560 191

1. Dividend per share, interim dividend included, is 7.00 for 1996FY and 1995FY.
2. Statutory auditor bonuses totaled 11 million in 1996FY and 1995FY.

BALANCE SHEET-ASSETS

ASSETS Millions of yen

3/31/1997 3/31/1996 Change

Current Assets
876,334

864,296

12,038

Cash on hand and in banks
8,767

64,373

-55,606

Notes receivable
5,641

6,319

-678

Accounts receivable
521,778

469,801

51,977

Marketable securities
64,574

58,973

5,601

Finished products
88,377

83,948

4,429

Raw materials and supplies
11,747

10,839

908

Work in process
86,590

69,873

16,717

Advanced payments
63

---

63

Prepaid expenses
961

217

744

Short-term loans receivable
11,657

15,882

-4,225

Other current assets
80,377

87,932

-7,555

Allowance for doubtful accounts
-4,203

-3,867

-336

Fixed Assets
829,576

772,741

56,835

(Tangible fixed assets)
(517,543)

(514,486)

(3,057)

Buildings
91,730

88,207

3,523

Structures
22,841

13,873

8,968

Machinery and equipment
176,960

184,610

-7,650

Transportation equipment
3,654

3,535

119

Tools, furniture and fixtures land
22,399

21,973

426

Land
177,910

163,191

14,719

Construction in progress
22,045

39,094

-17,049

(Intangible fixed assets)
(1,415)

(1,461)

(-46)

Intangible fixed assets
1,415

1,461

-46

(Investments)
(310,617)

(256,793)

(53,824)

Investment securities
37,618

35,884

1,734

Investments in subsidiaries
202,539

181,587

20,952

Long-term loans receivable
32,579

3,753

28,826

Miscellaneous investments and guaranty money
22,761

20,623

2,138

Long-term prepaid expenses
15,331

14,982

349

Other investments
8,213

7,665

548

Allowance for doubtful accounts
-8,425

-7,704

-721

TOTAL ASSETS

1,705,910

1,637,038

68,872

BALANCE SHEET-LIABILITIES AND CAPITAL

LIABILITIES Millions of yen

3/31/1997 3/31/1996 Change

Current Liabilities
828,896

883,890

-54,994

Notes payable
26,959

31,840

-4,881

Accounts payable
393,880

389,329

4,551

Short-term loans payable
190,414

224,713

-34,299

Bonds (Payable within a year)
---

50,000

-50,000

Other accounts payable
98,910

84,491

14,419

Enterprise taxes payable
3,247

1,438

1,809

Accrued expenses
35,774

34,506

1,268

Advanced received
6,513

1,805

4,708

Deposits received
12,254

9,405

2,849

Employees savings deposits
28,584

28,834

-250

Warranty claims allowance
24,510

24,507

3

Other current liabilities
7,847

3,017

4,830

Fixed Liabilities
399,705

285,414

114,291

Bonds
208,923

149,999

58,924

Long-term loans payable
99,146

46,611

52,535

Deposit received for guarantee
18,416

17,780

636

Accrued severance indemnities
73,218

71,023

2,195

TOTAL LIABILITIES

1,228,602

1,169,304

59,298

Capital
136,221

135,664

557

Statutory Reserves
113,704

112,487

1,217

Capital surplus
105,337

104,780

557

Legal reserve
8,367

7,706

661

Earned Surplus
227,381

219,582

7,799

Special depreciation reserve
159

177

-18

Overseas investments loss reserve
979

1,148

-169

Reserve for deferred gains of fixed assets
19,160

19,544

-384

Special reserve
170,000

---

170,000

Unappropriated retained earnings at end of period
37,082

198,712

-161,630

(Net income)
(15,067)

(20,468)

(-5,401)

TOTAL SHAREHOLDER'S EQUITY

477,308

467,734

9,574

TOTAL LIABILITIES & SHAREHOLDER'S EQUITY

1,705,910

1,637,038

68,872

NOTES TO FINANCIAL STATEMENTS

1.SIGNIFICANT ACCOUNTING POLICIES

(1)	Marketable securities
	Shares with exchange quotation	Determined at the lower of cost or market using the moving average method
	Other marketable securities:	Determined at cost using the moving average method
(2)	Inventories
	Finished products & work in process:	Value determined on a First-in, First-out basis.
	Raw materials	Valued at cost using the overall average method
(3)	Depreciation of tangible assets	Depreciation is provided on a declining balance basis.
(4)	Allowances
	Doubtful accounts	The allowance for losses due to doubtful accounts is maintained at a level deemed appropriate in view of the legal limits and after assessment of collectibility.
	Warranty claims	The allowance for warranty claims is based on previous experience in accordance with the provisions of the warranty
	Accrued severance indemnities	The allowance for severance indemnities provides, in the case of employees retiring voluntarily, 40% of the sum payable at year-end and, in the case of directors, 100% of the sum payable on the basis of office regulations governing director retirement benefits at year-end.
(5)	Lease transactions	Financing leases, excluding leases in which ownership is recognized to have transferred to the lessee, are determined in accordance with normal lease accounting procedures.
(6)	Consumption tax	The amounts given in the Financial Statements are ex- consumption tax

2.NOTES TO BALANCE SHEET

1)	The treasury stock (92 shares) included in Marketable Securities amounts to less than 1 million
2)	Accumulated depreciation of tangible fixed assets	871,681million yen
3)	In addition to fixed assets included in the balance sheet, there are leased dies for automotive production and computers as important fixed assets.	871,681million yen
4)	Amount receivable from and payable to subsidiaries
	Short-term receivables
	Long-term receivables	9,232million yen
	Short -term payables	77,907million yen
	Long-term payables	8,363million yen
5)	Export bills discounted	9,253million yen
6)	Contingent liabilities for loan guarantees	267,589million yen
7)	Assets subject to lien	2,265million yen
8)	Major assets and liabilities in foreign currencies
	Accounts receivable	38,716million yen
	(Foreign denominated accounts US$240 million)
	Investments in subsidiaries	96,623million yen
	(Foreign denominated investments US$666 million)
9)	The balance of warrants and exercise price regarding notes with warrants are as follows:
	The first unsecured bonds due 1999 with detachable warrants
	Balance of warrants	49,962million yen
	Exercise price	817 yen
10)	Earnings per share for the current fiscal year (par value: 50)	16.36 yen
11)	The accrued severance indemnities for directors and statutory auditors amounting to 3,908million is the allowance stipulated by article 287-(2) of the commercial code.
12)	The increase of stock issued and capital by conversion of convertible bonds are as follows:
	Increase of stock issued	1,213,000
	Conversion price	887 yen
	Increase of capital	538 million yen
13)	The increase of stock issued and capital by exercise of warrants are as follows:
	Increase of stock issued	47,000
	Exercise price	817 yen
	Increase of capital	19 million yen

3.NOTES TO PROFIT AND LOSS STATEMENT

1)	Amount of transactions with subsidiaries
	Sales to subsidiaries	1,083,137 million yen
	Purchases from subsidiaries	178,829 million yen
	Non-operating transactions with subsidiaries	14,604 million yen

Notes on finance lease transactions, excluding leases where ownership has transferred to borrower

1.Assumptive acquisition cost, assumptive accumulated depreciation and assumptive book value of lease assets

	Millions of yen
	1996FY
(1) Assumptive acquisition cost Tools, furniture and fixtures Others	105,959 6,110
Total	112,070
(2) Assumptive accumulated depreciation Tools, furniture and fixtures Others	68,182 3,301
Total	71,484
(3) Assumptive book value Tools, furniture and fixtures Others	37,777 2,809
Total	40,586

2.Lease payable at end of fiscal year

	Millions of yen
	1996FY	1995FY
Due within a year	24,949	22,745
Due over a year	34,189	34,876
Total	59,138	57,621

3.Lease payments, assumptive depreciation expense and assumptive interest expense for fiscal year

	Millions of yen
	1996FY	1995FY
Lease payments	29,386	26,383
Assumptive depreciation expense	25,183
Assumptive interest expense	3,555

4.Depreciation amount is determined using the declining balance method.

5. Interest expenses are taken as the difference between total lease amount and lease ac quisition price and are allocated to different settlement terms by the interest method.