Mitsubishi is laying of workers as part of a cost cutting drive

Japan's only unprofitable auto firm unveiled first-quarter operating losses of 31.71 billion yen ($285m; �156.5m) in the three months to June.

Mitsubishi said the figure represented a quarter of its full-year loss forecast of 120 billion yen.

A recall scandal has halved Mitsubishi's domestic sales in the past few months.

Stalled

Mitsubishi's shares closed down 3.8% on Wednesday, having plumbed a fresh record low during the day following a 12% dive on Tuesday.

Revelations that Mitsubishi and its truck division Mitsubishi Fuso had been hiding defects to prevent product recalls have cut the company's car sales in Japan by more than 50% in each of the last three months.

Mitsubishi's future was thrown in doubt after US-German car maker DaimlerChrysler withdrew support for its Asian partner in April, but Mitsubishi has since brokered a $4bn rescue package.

Mitsubishi is now implementing a world-wide cost cutting drive, and said last month it would lay off 1,200 workers at its only US factory later this year.

Unflattering comparisons with strong growth in sales and profits revealed by Toyota and Suzuki on Tuesday contributed to the drop in Mitsubishi's share price.

Mitsubishi's net losses deepened to 54.6bn yen, compared to 51.14bn yen in the April-June period of 2003.

The company is forecasting a full year net loss of 230bn yen.