INTERVIEW-Profit margin key for Daimler to up MMC stake


TOKYO, June 25 (Reuters) - Mitsubishi Motors Corp's chief executive, Rolf Eckrodt, said on Tuesday that a five percent operating profit margin was a key target to be met before DaimlerChrysler AG would lift its stake in the Japanese automaker.

DaimlerChrysler has a 37.3 percent holding in Japan's fourth-largest automaker, with an option to raise the stake from October 2003.

"I think the only criteria for a stronger engagement is the success of the company," Eckrodt told Reuters in his first interview after becoming Mitsubishi's chief executive earlier on Tuesday.

Asked how he defined success, Eckrodt said a five percent operating margin was crucial.

"For me, it is to gain around about a five percent return on sales in a reasonable time and that's probably the first step," he said. "The rest we will define later on".

Mitsubishi is targeting a margin of 4.5 percent in the next business year beginning April 2003.

Eckrodt said that a level of five percent could come in either 2004/05 or the year after but that a lot would depend on external factors such as the state of the Japanese and U.S. economies.



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