News: Japanese automaker Mitsubishi Motors is considering whether to issue a public offering of new shares to raise up to US$2bn, the Detroit News reports. The carmaker is pondering the move as it attempts to reduce preferred stock held by Mitsubishi UFJ Financial Group, Mitsubishi Heavy Industries and Mitsubishi, sources close to the matter suggest. Those Mitsubishi companies bailed out their car affiliate during 2004/05 and have since been trying to convert their preferred stock due to the absence of dividend payments. Although Mitsubishi has made no comment, it is rumoured that the sale will take place between January and March 2014.
BMI View: The expected contraction in Japanese auto sales has continued into June, as sales for the month fell 10.8% y-o-y, taking the total for the first six months of 2013 down 8.0% y-o-y. We forecast over a 4.8% decline for 2013, based on the incentivised growth of 2012, which we believe will be difficult to repeat. However, we are upgrading our 2013 auto sales forecast from our previous estimate of a 11.4% drop.