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By Chang-Ran Kim and Edwina Gibbs
TOKYO, May 26 (Reuters) - Japan's Mitsubishi Motors Corp forecast on Monday a sharp slowdown in profit growth this year as the yen's rise against the dollar and intense competition hit earnings from the key U.S. market.
Japan's fourth-largest automaker, owned 37 percent by DaimlerChrysler AG , said it expected group operating profit to rise 8.7 percent to 90 billion yen ($770 million) in the year to next March, in line with a consensus forecast in a survey of 15 brokerages by Reuters Research.
Mitsubishi reported operating profit growth of 105.7 percent in the just-completed financial year.
Analysts have voiced concern about the recent slide in Mitsubishi's sales in the U.S. market -- one of its few sources of profit in the past few years -- where Detroit's "Big Three" are offering incentives to win market share.
Mitsubishi's sagging sales have already led to a big rise in inventories and sales incentives, threatening to eat into profits. Its U.S. sales have fallen more than 20 percent in each of the last three months.
For the year that ended in March, operating profit more than doubled to 83 billion yen while net profit more than tripled to a record 37 billion yen, thanks to cost cuts and robust sales overseas.
The results mirrored revised estimates announced a month ago. Sales grew 21.4 percent to 3.88 trillion yen, partly boosted by a change in the accounting period for its overseas subsidiaries, which added three months' worth of revenues.
Now in the final year of a three-year turnaround plan, Mitsubishi aims to lessen its dependence on the United States by strengthening its domestic operations. Sales in Japan have been falling due to a lack of new models and a tarnished brand image after a massive recall three years ago.
But analysts say a healthy U.S. performance is indispensable for the foreseeable future and they remain concerned, particularly by a dearth of new models there.
Only the Endeavor is scheduled for launch this year into the extremely competitive sport utility vehicle (SUV) segment.
The automaker expects a net profit of 40 billion yen this year on sales of 2.9 trillion yen. The earnings will no longer include the Fuso truck unit, which was spun off in January.
Mitsubishi expects its group's global vehicle sales to fall 17 percent to 1.63 million units this business year, with overseas sales dropping 21 percent.
The company's shares have lost about four percent in the year to date, compared with a seven percent fall in Tokyo's transport equipment index .
The announcement came during afternoon trade on the Tokyo Stock Exchange. The shares were up 0.82 percent at 247 yen by 0415 GMT. ($1=116.94 yen)