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TOKYO - Scandal-tarnished Mitsubishi Motors trimmed its losses for the quarter ended Dec. 31 compared to the same period a year earlier, although it continued to struggle to boost revenue.

The Japanese automaker Thursday reported a 4.3 billion yen ($36 million) net loss for its fiscal third quarter, considerably better than the 49.4 billion yen loss for the third quarter of 2004.

Tokyo-based Mitsubishi Motors Corp., parent company of Mitsubishi Motors North America in Normal, has struggled for several years to restore its image and boost sales as it fought recurring scandals centered on cover-ups of auto defects.

Sales for the October-December period totaled 538 billion yen ($4.6 billion), down 2 percent from 547 billion yen the previous year.

Lower advertising costs in the United States and Europe as well as the weaker yen helped the company trim its loss, Mitsubishi Motors said in a statement. A weaker yen tends to help the earnings of Japanese exporters when converting overseas earnings into yen. Also adding to the latest results was the absence of losses this fiscal year related to the U.S. financial services unit that came in fiscal 2004, the company said.

In 2000, Mitsubishi Motors acknowledged it had been systematically hiding auto defects from authorities for more than two decades. The automaker has announced a spate of recalls since then, and disclosed in 2004 it had failed to come clean in 2000 and had more concealed defects.

Mitsubishi Motors' sales had been lagging even before the defect scandal surfaced, as it fell behind powerful domestic rivals like Toyota Motor Corp. and Honda Motor Co.

Mitsubishi already had suffered earlier scandals since the mid-1990s, including a sexual harassment lawsuit in the United States and arrests of executives on criminal charges in Japan of paying off racketeers tied to gangsters.

But faith in the Mitsubishi brand, respected for decades in the past, took its worst hit among Japanese consumers with the defect cover-up. The defects are suspected in two fatal accidents in 2002 in Japan. In one accident, a tire rolled off a truck and crushed a pedestrian. In the other accident, a truck crashed after its brakes failed and killed the driver.

Mitsubishi Motors appeared to be on a turnaround for a few years under an alliance with DaimlerChrysler AG, but the German automaker withdrew additional financing in 2004.

Since then, Mitsubishi Motors has received massive cash infusions from the Mitsubishi group of companies, including a bank, machinery maker and trading company, to support revival efforts.

The automaker said the recovery remains on track.

"Mitsubishi Motors considers the third-quarter performance decent and that the announced full-year forecasts are within reach," it said.

Sales of new models were exceeding the company's sales target in Japan, and vehicle sales were robust in Latin America, Russia and the Middle East, although sales lagged in North America amid higher oil prices and declining fleet sales, the company said.

For the first three quarters of this fiscal year, Mitsubishi Motors sold 985,000 vehicles globally, up 4 percent from the same period a year ago.

Mitsubishi Motors kept unchanged its forecast for the year ending March 31 at a 64 billion yen ($542 million) loss on 2.22 trillion yen ($19 billion) in sales.

Mitsubishi Motors shares, which have gained two-thirds over the last year, finished at 247 yen ($2), down 2 percent, in Tokyo.


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