Statement re Credit Rating

RNS Number:8144T
Mitsubishi Motors Corporation
5 January 2004

LETTER TO:  RNS

Programme for the issuance of Debt Instruments Dated on 18th August, 1994 for
Mitsubishi Motors Corporation, Mitsubishi Motors Credit of America, Inc. and MMC
International Finance (Netherlands) B.V.

We inform you that Rating and Investment Information, Inc.(R&I) downgraded the
rating for Senior Long-term Credit Rating, Long-term Bonds and Domestic
Commercial Paper Programme effective from December 30, 2003.

Please find attached the press release by R&I

From:  Tetsuo Matsuzawa (General Manager, Treasury Department)
       Mitsubishi Motors Corporation
 
Rating and Investment Information, Inc.  (R&I), has downgraded the following
ratings. The ratings remain on the Rating Monitor scheme with a view to
downgrading them:

ISSUER:             Mitsubishi Motors Corp. (See. Code : 7211)
                    Senior Long-term Credit Rating 

R&I RATING:         (BB-); Downgraded from (BB);
                    Remains on the Rating Monitor scheme with a view to 
                    downgrading 

                    Long-term Bonds (3 series) 

R&I RATING:         (B+); Downgraded from (BB);
                    Remains on the Rating Monitor scheme with a view to 
                    downgrading

                    Domestic Commercial Paper Programme 

R&I RATING:         b ; Downgraded from (a-3);
                    Removed from the Rating Monitor scheme

RATIONALE:

In North America, Mitsubishi Motors has completed disposal of losses which
included a loan loss allowance increase of 50.6 billion yen for the impairment
of sales finance assets during the September 2003 midterm. However, because the
company has suspended further high risk loans, sales of new automobiles have
fallen into a slump. While domestic sales have begun to pick up, however, they
have concentrated mainly on the small Colt model and are unlikely to result in a
substantial improvement in earnings. While the company secures consistent
earnings in Asia and other regions, it has not been able to come up with a plan
for improvement that will bring quick relief to its automotive business in
general.

On the financial side, net interest bearing debt in the automotive business
climbed from 506 billion yen to 726 billion yen in the half year from the end of
March to the end of September 2003 as a result of additional capital injections
in its North American sales finance companies. In addition, equity capital
dropped to 180.9 billion yen in the same period. It is necessary to pay
attention whether the company can accomplish the earnings plan in regards to the
possibility of recovery of 134.1 billion yen in deferred tax assets. Mitsubishi
Motors is planning to sell off assets including securities in the March 2004
latter half year but its ability to create a healthy sales cash flow has
declined due to flagging sales. If this situation persists over the long term,
it will also have an impact on the cash flow.

The severity of the operational environment in North America is increasing as
the entire industry becomes caught up in excessive competition based on the
sales promotion incentives, and operational risk is increasing. On the other
hand, the difference in financial resilience between Mitsubishi Motors and other
automotive companies is widening further and this situation may impede efforts
to promote structural reform. In view of these factors, R&I has downgraded the
Senior Long-Term Credit Rating to BB-. The rating will remain on the Rating
Monitor scheme with a view to down grading. R&I has also downgraded the
Commercial Paper Programme to a "b" rating and has removed it from the rating
monitor scheme. The company's financial composition on an unconsolidated basis
has deteriorated during the September 2003 midterm as a result of an increase in
interest bearing debt and consequently, R&I has placed a separate rating for
unsecured straight bonds at B+ in order to reflect a one notch subordination due
to recovery risk.

The challenge for Mitsubishi Motors in the days ahead lies in whether it can
move quickly to consolidate new reconstruction plans through measures that would
include a cooperative relationship with Daimler Chrysler.

R&I RATINGS:

ISSUER:                    Mitsubishi Motors Corp. (Sec. Code: 7211) 
                           Senior Long-term Credit Rating (BB-); Downgraded from (BB);
                           Remains on the Rating Monitor scheme with a view to downgrading

ISSUE:           Bonds Rated             Issue Date           Redemption              Issue Amount (mn)

Unsec. Str. Bonds No. 5                 May 28, 1997         May 28, 2009                 Yen 30,000

Unsec. Str. Bonds No. 6                 May 28, 1997         May 28, 2007                 Yen 10,000

Unsec. Str. Bonds No. 7                 May 28, 1997         May 28, 2004                 Yen 20,000

R&I RATING:                (B+); Downgraded from (BB);
                           Remains on the Rating Monitor scheme with a view to downgrading

ISSUE:                     Domestic Commercial Paper Programme
                           Issue Limit: Yen 250,000 million 

R&I RATING:                b; Downgraded from (a-3);
                           Removed from the Rating Monitor scheme

An R&I Senior Long-term Credit Rating is an opinion regarding an issuer's
overall capacity to pay its entire financial obligations, without taking into
account the degree of recovery of specific obligations.

A Senior Long-term Credit Rating will be assigned to all issuers. Ratings for
individual issues may differ from the Senior Long-term Credit Rating depending
on the terms and conditions of the issue.

                      This information is provided by RNS
            The company news service from the London Stock Exchange

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