Specifically, Mitsubishi Motors is considering asking
shareholders to approve plans for a 10-for-1 reverse stock
split, the people said. At the same time, the company may ask
shareholders to approve a capital reorganisation – a change in
accounting that would make it possible to resume paying
dividends.

The plan under consideration would clear Mitsubishi Motors’
more than 920 billion yen ($8.9 billion) in accumulated losses
by reducing capital stock by an equivalent amount, a common step
for Japanese companies with a history of deep losses that have
returned to profitability and want to begin paying dividends.

A spokesman for Mitsubishi Motors said the company had no
immediate comment.

No final decision has been made but Mitsubishi Motors could
announce the first of the steps as soon as Friday and put it
before shareholders at the annual meeting at the end of June,
according to the sources.

Taken together, the steps under consideration are intended
to close a chapter that began with a 2004 bailout for Mitsubishi
Motors.

Shares in Japan’s seventh-biggest automaker by sales volume
fell 11.5 percent on Thursday to 162 yen – set for its biggest
one-day drop in more than 2 years. The stock had risen about 25
percent within a week.

FAILED TIE-UPS

Over the past decade, Mitsubishi Motors has struggled with
failed tie-ups with Daimler AG and Chrysler, quality
and safety problems and the costs of being a niche player in the
global market for cars and light trucks.

Mitsubishi Motors expects a record operating profit for the
financial year to next March, helped in part by a weaker yen
. Shares in the company gained about 140 percent from
mid-November to early Thursday.

Although Mitsubishi has a strong position in Thailand and
some other Southeast Asian markets it has struggled in Europe
and the United States, where it operates a plant in Illinois
that it hopes to use as a hub for exports.

Osamu Masuko, who has served as Mitsubishi Motors’ president
for 10 years, said last month he wanted to see the automaker
move toward resuming dividend payments. “As we work through our
plan, I want to resolve a question that has been pending for
many years and set a timeframe for the resumption of dividends,”
Masuko told reporters then.

Mitsubishi group companies – including MUFJ,
Japan’s largest bank, Mitsubishi Corp, and Mitsubishi
Heavy Industries, the three architects of the
Mitsubishi Motors rescue – control 34 percent of the automaker’s
voting shares.

Mitsubishi group companies stepped in to rescue Mitsubishi
Motors in 2004 by taking the bulk of a preferred share offering.
The rescue plan came after the company’s then-president and
other employees were implicated in systemically covering up
safety defects.

Mitsubishi Motors’ best-selling models on a global basis are
the Triton pickup truck and the small SUV sold as both the RVR
and Outlander Sport. Global sales dipped 1 percent in the past
fiscal year to 987,000 vehicles.

Specifically, Mitsubishi Motors is considering asking
shareholders to approve plans for a 10-for-1 reverse stock
split, the sources said.

At the same time, Mitsubishi is considering whether to ask
shareholders to approve a capital reorganisation, a change in
accounting that would make it possible to resume dividend
payments.

The plan under consideration would clear the company’s more
than 920 billion yen ($8.9 billion) in accumulated losses by
reducing capital stock by an equivalent amount, a common step
for Japanese companies with a history of deep losses that have
returned to profitability and want to begin paying dividends.

A spokesman for Mitsubishi Motors said the company had no
immediate comment.

No final decision has been made but Mitsubishi Motors could
announce the first of the steps as soon as Friday and put it
before shareholders at the annual meeting at the end of June,
according to the sources.

Taken together, the steps under consideration are intended
to close a chapter that began with a 2004 bailout for Mitsubishi
Motors.

Over the past decade, Japan’s seventh-largest automaker has
struggled with failed tie-ups with Daimler AG and
Chrysler, quality and safety problems and the costs of being a
niche player in the global market for cars and light trucks.

Mitsubishi Motors forecast a record operating profit for the
financial year to next March, helped in part by a weaker yen.
Shares in the company have gained over 260 percent since the end
of November to 183 yen at Wednesday’s close.

Although Mitsubishi has a strong position in Thailand and
other Southeast Asian markets it has struggled in Europe and the
United States, where it operates a plant in Illinois it hopes to
use as a hub for exports.

Osamu Masuko, who has served as Mitsubishi Motor’s president
for 10 years, said in late April he wanted to see the automaker
move toward resuming dividend payments.

“As we work through our plan, I want to resolve a question
that has been pending for many years and set a time frame for
the resumption of dividends,” Masuko told reporters.

Mitsubishi group companies – including MUFJ,
Japan’s largest bank, Mitsubishi Corp, and Mitsubishi
Heavy Industries, the three architects of the
Mitsubishi Motors rescue – control 34 percent of the automaker’s
voting shares.

Mitsubishi group companies stepped in to rescue Mitsubishi
Motors in 2004 by taking the bulk of a preferred share offering.
The rescue plan came after the company’s then-president and
other employees were implicated in systemically covering up
safety defects.

Mitsubishi Motors’ best-selling models on a global basis are
the Triton pickup truck and the small SUV sold as both the RVR
and Outlander Sport. Global sales were down 1 percent in the
past fiscal year to 987,000 vehicles.

The link-up between Honda and McLaren, the second most successful team in the sport after Ferrari in terms of race wins and drivers’ titles, will revive one of the greatest Formula One partnerships which was marked by multiple championships with the late Ayrton Senna and Alain Prost between 1988 and 1992.

Honda, who will replace Mercedes as McLaren’s engine partner, withdrew from the sport in late 2008 in the middle of a global financial crisis after years of hardly ever winning.

The company said Formula One’s new engine regulations would allow it to apply racing technology to its road cars.

“As the direction of Formula One’s new technologies and the direction that Honda aims at for development matches, the young engineers who will be responsible for Honda in the future started to voice their desire to take part in the challenge,” Honda Motor Co Chief Executive Takanobu Ito told a news conference.

“More so than in the past, we can expect feedback from the race cars to common road cars and vice versa.”

Formula One is introducing a new V6 1.6-litre engine aided by high-power turbo technology with energy recovery systems from next season.

Ito gave two examples of technologies that could be applied from race cars to road cars – regenerative energy from the turbo, which changes the turbo’s rotational energy to electricity, and downsizing the turbo.

Martin Whitmarsh, McLaren’s Chief Executive, said crossover technologies would help the team.

“I think Formula One has been absolutely slow to adapt and to change to the new challenges which are relevant to the needs of society… Downsizing turbo charging, heavier hybrid content, these are areas (in which) I know Honda will excel,” he said.

LEARNING FROM ITS LESSONS

In recent years, Honda has been criticised for lacking the daring zeal it once had as an innovator. Ito hopes participation in the sport could change that view.

“We want to be an interesting and exciting company,” said Ito, who is known for designing the all-aluminium chassis of the NSX sports car released in 1991.

Honda first announced its intention to participate in Formula One in 1962, a year before it started to sell four-wheelers.

It debuted in the sport in 1964 at the German Grand Prix at the Nuerburgring, and its first grand prix win came a year later at the 1965 Mexican Grand Prix in Mexico City. It withdrew after the 1968 season.

Honda returned to the sport in 1983 as an engine provider and departed again in 1992. Its partnership with McLaren in 1988 led to the most dominant team Formula One has seen, with McLaren’s Senna and Prost winning 15 of the 16 races.

In 2000, Honda made a comeback as an engine supplier and joint developer of the chassis for BAR which, in 2006, became the Honda team. During the eight years until its withdrawal in 2008, Honda were triumphant once, when Briton Jenson Button won in 2006 in Hungary.

“My frank view is that it was very difficult to manage the entire operations, not just the engine,” Ito said, reflecting on the unsuccessful period.

“We should be modest and learn what we can from having managed a team. But we believe our engine technology will never lose.”

Button, who moved to McLaren at the end of 2009, said he was “thrilled and excited” about Honda’s return, adding in a statement: “McLaren-Honda: I know how much passion, success and pride are encapsulated within just those two words.” (Reporting by Yoko Kubota; Editing by Edwina Gibbs and Clare Fallon)

Honda’s Chief Executive Takanobu Ito is set to make an official announcement as early as Thursday, one of the sources added.

The Japanese automaker quit the sport at the end of 2008, handing over their team to then-principal Ross Brawn who went on to win both titles in 2009 with Mercedes-powered Brawn GP.

One source said Honda hoped Formula One’s new engine regulations for 2014 would help develop technology for its mass volume road cars, adding: “That incubator aspect of the sport makes Honda’s participation worthwhile.”

Formula One is set to introduce a new 1.6 liter V6 engine next year aided by high-power turbo technology with energy recovery systems.

The news about Honda’s return to Formula One was reported earlier on Wednesday in Japanese media including public broadcaster NHK and Asahi newspaper.

“There is nothing we can say at the moment,” Honda spokesman Shigeki Endo said.

McLaren are committed to using engines made by Mercedes, their former shareholders, next year but have not revealed their plans for beyond that date. A team spokesman had no comment on the reports.

The link-up with McLaren, the second most successful team in the sport after Ferrari in terms of race wins and drivers’ titles, would revive one of the greatest Formula One partnerships.

Honda had little success with their own team but powered McLaren to multiple championships with the late Brazilian triple champion Ayrton Senna and French four times champion Alain Prost between 1988 and 1992.

The partnership in 1988 was the most dominant in Formula One history, with Senna and Prost winning 15 of the 16 races.

The sources said Honda also hoped renewed participation in the sport will help boost vehicle sales, especially in Japan, Asia and Europe where Formula One is popular.

The two sources declined to be named as they were not authorized to speak about the matter.

Honda made its Formula One debut at the 1964 German Grand Prix at the Nuerburgring. The company’s first grand prix win came just a year later at the 1965 Mexican Grand Prix in Mexico City and they then withdrew after the 1968 season.

They returned to the sport as an engine provider in 1983 and departed again in 1992.

In 2000, Honda made a comeback with BAR, which then became the Honda team in 2006. The only success in that period was Jenson Button’s 2006 win in Hungary.

Button, world champion in 2009, is now a McLaren driver along with Mexican Sergio Perez.

(Reporting by Norihiko Shirouzu in Beijing and Yoko Kubota in Tokyo, editing by Alan Baldwin and Alison Wildey)

Honda’s Chief Executive Takanobu Ito is set to make an official announcement as early as Thursday, one of the sources added.

The Japanese automaker quit the sport at the end of 2008, handing over their team to then-principal Ross Brawn who went on to win both titles in 2009 with Mercedes-powered Brawn GP.

One source said Honda hoped Formula One’s new engine regulations for 2014 would help develop technology for its mass volume road cars, adding: “That incubator aspect of the sport makes Honda’s participation worthwhile.”

Formula One is set to introduce a new 1.6 litre V6 engine next year aided by high-power turbo technology with energy recovery systems.

The news about Honda’s return to Formula One was reported earlier on Wednesday in Japanese media including public broadcaster NHK and Asahi newspaper.

“There is nothing we can say at the moment,” Honda spokesman Shigeki Endo said.

McLaren are committed to using engines made by Mercedes, their former shareholders, next year but have not revealed their plans for beyond that date. A team spokesman had no comment on the reports.

The link-up with McLaren, the second most successful team in the sport after Ferrari in terms of race wins and drivers’ titles, would revive one of the greatest Formula One partnerships.

Honda had little success with their own team but powered McLaren to multiple championships with the late Brazilian triple champion Ayrton Senna and French four times champion Alain Prost between 1988 and 1992.

The partnership in 1988 was the most dominant in Formula One history, with Senna and Prost winning 15 of the 16 races.

The sources said Honda also hoped renewed participation in the sport will help boost vehicle sales, especially in Japan, Asia and Europe where Formula One is popular.

The two sources declined to be named as they were not authorised to speak about the matter.

Honda made its Formula One debut at the 1964 German Grand Prix at the Nuerburgring. The company’s first grand prix win came just a year later at the 1965 Mexican Grand Prix in Mexico City and they then withdrew after the 1968 season.

They returned to the sport as an engine provider in 1983 and departed again in 1992.

In 2000, Honda made a comeback with BAR, which then became the Honda team in 2006. The only success in that period was Jenson Button’s 2006 win in Hungary.

Button, world champion in 2009, is now a McLaren driver along with Mexican Sergio Perez.

Infiniti, produced mostly in Japan and exported overseas,
accounted for less than 1 percent of Nissan’s operating profit
in the last two years, Ghosn told reporters on Tuesday. Nissan
booked an operating profit of 523.5 billion yen ($5.15 billion)
for the year ended March.

While the yen has been depreciating in recent months,
trading at around 101 yen against the dollar from 78 yen back in
October, Ghosn expects a boost in Infiniti’s profitability.

“Fundamentally so far, Infiniti’s contribution to the
operating profit of Nissan has been practically erased by the
abnormal strength of the yen,” Ghosn told reporters at Nissan’s
Tochigi plant in Japan. “Infiniti will bring back a very
significant contribution to the operating profit of Nissan,” he
said, adding that he is hopeful the Japanese currency will
further weaken to about 110 yen against the dollar.

Nissan’s senior vice president and head of Infiniti, Johan
de Nysschen, added that the company aims to bring Infiniti’s
operating profit margin either equal with or more than that of
the Nissan brand by next year.

Nissan posted an operating profit margin of 5.4 percent in
the financial year ended March.

EXPANDING PRODUCTION GLOBALLY

Nearly 14 years after the launch of its first car, the Q45
luxury sedan, Infiniti continues to be largely a U.S.- centric
brand with meagre overseas sales.

Most of the vehicles are produced in Japan, though the brand
is not sold at the home market, and years of a strong yen has
made it unprofitable to export cars from Japan.

In the financial year ended March, Infiniti sold 172,615
vehicles globally, up 12.1 percent year-on-year. The company
aims to nearly triple that to 500,000 by the financial year
ending March 2017.

To do so, de Nysschen said in January that he expects the
brand to be building more than half of its vehicles outside
Japan in the medium term.

Nissan, which currently builds most of the Infiniti vehicles
at the Tochigi plant in Japan, as well as at Kyushu in Japan and
Smyrna, Tennessee in the United States, has already announced
its plans to start building the premium vehicles at its
Xiangyang plant in China from 2014, as well as at the Sunderland
plant in the United Kingdom from 2015.

The company aims to make China the second biggest market for
Infiniti after the United States, so that the world’s biggest
auto market will account for about 40 percent of Infiniti’s
global sales by 2016-17.

Ghosn said that the company is also planning to build more
Infinitis in North America.

“There is no doubt that part of expansion of Infiniti is
going to happen in North America,” he said on the sidelines of a
ceremony to mark the start of productions of the new Q50 sedan
at the Tochigi plant. He declined to give details about the
site.

Infiniti’s best selling model is the G sedan, accounting for
more than a third of total annual sales. The successor of the
G37 sedan, with a new name Q50, will go on sale in the United
States in the summer.

($1 = 101.7450 Japanese yen)

(Editing by Matt Driskill)

The company, which exports nearly 70 percent of its
Japan-made production, wants to make more vehicles in its
biggest market, the United States, to limit the impact of
currency moves.

Along with the expansion, which will utilize an existing
line, Fuji Heavy is set to hire about 900 employees at the
Subaru of Indiana factory, CEO Yasuyuki Yoshinaga told
reporters.

“We continue to see strong sales in the United States, and
we were seeing a situation in which there was a lack of car
supply,” Yoshinaga said. “We think this will contribute to the
regional economy of Indiana.”

The plant will start to produce the Impreza compact car
using the added capacity, he said, the first time the Impreza
will be produced outside of Japan.

The carmaker currently produces Outback, Legacy and Tribeca
at its plant in Indiana, as well as Toyota Motor Corp’s
Camry. Toyota owns 16.47 percent of Fuji Heavy shares.

The plant currently has an annual capacity of 270,000
vehicles, of which 100,000 is devoted to the Camry. The capacity
for Toyota’s Camry will stay at 100,000 vehicles, Yoshinaga
said.

The $400 million investment will boost total capacity to
400,000 vehicles by end-2016.

Fuji Heavy, Japan’s smallest carmaker by volume, booked on
Wednesday a record annual operating profit of 120.4 billion yen
($1.22 billion) for the financial year ended March, more than
double the 44 billion yen it booked in the previous year, on
strong sales in the United States, aided by the yen’s
depreciation versus the dollar.

Toyota is expected to post on Wednesday an annual operating
profit of 1.26 trillion yen ($12.69 billion) according to
Thomson Reuters StarMine’s SmartEstimates, with an operating
margin of about 5.6 percent. SmartEstimates place emphasis on
timely forecasts by top-rated analysts.

That would mean the company has achieved the target
President Akio Toyoda set two years ago: to make 1 trillion yen
in annual operating profit, and do so with a 5 percent margin.
Its Japanese manufacturing arm is also likely to post a profit
for the first time in five years.

For Toyoda, mindful of lessons learned from huge losses run
up in 2008 after a period of boom and rapid expansion, high
profits are no reason to launch into a building programme – even
as some rivals do exactly that.

“I became painfully aware that the most important thing is
to keep growing at a sustainable pace. Expanding vehicle volume
does not equate with growth, because fixed costs also increase,”
the 57-year-old grandson of the founder of Toyota’s automotive
business said in March. “I want this year to think about what
competitiveness really means for Toyota.”

Since Toyoda took helm in 2009, when profit margins were
thin, the automaker has focused on cutting costs and improving
profitability.

Evidence of Toyoda’s caution is his fresh policy to build no
new factories for the next three years, a sharp contrast with
Honda Motor Co which is rapidly adding to its
production power around the world.

RECORD SALES EXPECTED

Many analysts say Toyota will remain competitive.

“Toyota will have enough capacity. It could see some
opportunity losses such as in volume and market share, but its
priority is profitability,” said Koji Endo, an auto analyst at
Advanced Research.

Despite building no new plants Toyota, which currently has
an annual production capacity of around 9 million vehicles, will
still be able to make more cars.

It will stick with pre-existing plans to build new factories
such as in Thailand and Indonesia and will also add capacity at
plants already running, for example at its Kentucky plant in the
United States.

Toyota expects another year of record group sales in 2013,
reaching 9.91 million vehicles. It could become the first
carmaker in history to sell more than 10 million vehicles a
year.

For the financial year to end-March 2014, analysts estimate
2 trillion yen in operating profit, nearing its record from five
years ago, helped by the yen that has weakened by around
15 percent against the dollar since January. Toyota exports
about 60 percent of its Japan-made vehicles.

After recovering from a damaging safety recall in 2010 and a
huge earthquake in 2011 in Japan that disrupted supply chains,
Toyota booked record group-wide sales of 9.7 million vehicles in
2012, beating General Motors Co and Volkswagen AG
.

On Wednesday, Fuji Heavy Industries Ltd, which
makes Subaru cars, is likely to book record annual operating
profit of 120 billion yen for the year ended in March, more than
double last year’s figure. The company is set to announce a plan
to expand capacity in the United States, its biggest market.

“Colorless Tsukuru Tazaki and His Years of Pilgrimage” has attracted positive reviews, with readers spotting familiar Murakami themes such as people bonding through pain.

Publisher Bungeishunju made the rare decision to print 1 million copies within a week of its April release in Japan.

The novel is about a lonely 36-year-old engineer named Tsukuru Tazaki, who embarks on trips in Japan and Finland to overcome his most painful experience – broken friendships.

“Usually things are divided into the real and unreal, but I was wondering how it will be if I bring all of that into the stage of the real world,” Murakami told an audience of about 500 fans in Kyoto.

“People get hurt and close their minds, but as time passes, they gradually open up, and they grow as they repeat that. This novel is about growth.”

The fans who won a lottery to attend the event were surprised that the 64-year-old, whose fiction is often surreal and who has made a handful of speeches overseas in recent years but none in Japan, was actually speaking to the public.

“I am a fan of his novels but I have never seen him in person nor heard his voice. Is he a normal person?” Hiroko Yamada, 40, asked as she waited for the event to start.

Murakami said he decided to speak in public to honor his friend Hayao Kawai, a psychologist who died in 2007.

“It’s not like I get purple dots all over myself when I am in front of many people. I like to go around on the bus and the subway and live a normal life,” he joked.

“I want you to think of me like an endangered species – it’s fine to look at me from far away, but be careful because I may bite if you come near and talk to me or touch me.”

(Editing by Robert Birsel)

Japan Airlines Co Ltd and local rival All Nippon
Airways account for almost half of the 50 Dreamliners
worldwide that have been grounded since mid-January following
two separate lithium-ion battery incidents in Boston and western
Japan.

Akihiro Ota, Japan’s transport minister, told reporters in
Tokyo that aviation authorities would officially approve the
resumption of Dreamliner flights for Japanese airlines later on
Friday, by issuing a revised “technical circular directive”.

The move will come after the U.S. Federal Aviation
Administration (FAA) gave formal approval on Thursday for a new
lithium-ion battery system for the Dreamliner. The FAA’s
airworthiness directive will be effective later on Friday after
it is published in the Federal Register.

In addition to the battery fix approved by the FAA, Japan’s
Civil Aviation Bureau will require airlines to meet the
country’s own safety standards when flying the 787, which
include monitoring the battery current while the jet is in the
air and checking used batteries.

“It is important that we continuously explain in order to
resolve worries and to convey that the jet is safe,” Ota said.

Japan’s aviation regulator said it followed the U.S.
National Transportation Safety Board’s public hearings held
earlier this week in Washington before coming to a decision on
flight restarts.

“We did not find anything new that shed doubt on the
adequacy of (Boeing’s) preventative measures,” said Shigeru
Takano, an official at the Civil Aviation Bureau.

Teams of Boeing engineers began installing reinforced
batteries on Dreamliners owned by All Nippon Airways on Monday.
ANA, the world’s biggest operator of the carbon-composite
aircraft with 17 Dreamliners, said it hopes to complete
retrofitting its entire fleet by mid-May.

The company also said on Friday that it is planning more
than 200 flights of its repaired aircraft before carrying
passengers.

The flights will check the safety of the aircraft and allow
ANA’s 180 Dreamliner pilots to get accustomed to flying it again
after more than a three-month break.

“I believe that safety has been secured assured now, but
only by flying the 787 smoothly will we will be able to
demonstrate its safety and reassure our passengers,” Hiroyuki
Ito, ANA senior executive vice president, told reporters.