Please look at page 3. This is Matsuoka speaking. Thank you very much for taking time out of your busy schedule to attend our earnings call for the third quarter FY 2023. But first of all, we would like to express our heartfelt sympathy to all those who have been affected by the 2024 Noto Peninsula earthquake. We sincerely pray for the safety of everyone in the affected areas and for the earliest possible recovery and reconstruction. Now, I would like to explain our results. So the third quarter, although vehicle supply shortages that were caused by the lack of semiconductors and vessels were resolved, but the demand in some regions still remained below our expectations. In this business environment, we achieved solid, solid results by improving the quality of sales and promoting the Net Revenue Strategy.
The net sales, so the net sales increased 14% year-on-year to JPY 2,063.9 billion, and the operating profit increased 4% year-on-year to JPY 160.1 billion. The OP margin was 7.8%, mainly due to continuous improvement of prices. The ordinary profit was JPY 166 billion, and the net income was JPY 102.8 billion, mainly due to the cost of business restructuring in China, booked in Q2. The retail sales volume decreased 7% year-on-year to 585,000 units, due to tighter logistics situation and slow recovery in the overall demand. Please turn to page 4. In this slide, you can see the factors behind the year-on-year changes in operating profit for the Q3 FY 2023.
The volume and Mixe/ selling price improved by JPY 64.7 billion year-on-year. And like, in the first half of the year, the volume grew in North America and nine point nine billion yen increase in the operating profit, and Mixe/ Selling price also contributed to a JPY 54.8 billion increase in profit. Sales expenses reduced the operatinSg profit by JPY 22.1 billion year-on-year, owing to an increase in expenses, which was increased in line with the plan. Out of the procurement cost, shipping cost, the raw material price is on the recovery trend, but was adversely affected by the inflation and other factors. They were partially offset by procurement cost reduction activities. However, the shipping cost and factory expenses also deteriorated, resulting in a total deterioration of the profit by JPY 29 billion.
The R&D expenses increased as planned, resulting in a JPY 5.7 billion decrease in profit, and other items deteriorated by JPY 17.8 billion, mainly due to an increase in expenses such as indirect labor cost and general expenses. The negative impact of the cost currency Thai baht was offset by the U.S. dollars and also other currencies, resulting in a favorable effect of JPY 16.3 billion, year-on-year. Please look at page 5. This slide explains the factors behind the year-on-year change in operating profit for the single quarter Q3 FY 2023. The volume Mix/ selling price improved by JPY 11.3 billion, year-on-year. Of this, Mix/S elling Price increased by JPY 8.6 billion, due to the promotion of Net Revenue Strategy.
As for the volume, the Middle East and Africa offset the downturn in ASEAN, contributing to an increase of JPY 2.7 billion in operating profit. Sales expenses deteriorated by JPY 9.8 billion due to an increase in incentives with the normalization of the competitive sales environment and increase in advertisement expenses. Procurement costs, shipping costs worsened by JPY 4.8 billion in total, mainly due to a deterioration in factory expenses impacted by inflation and an increase in special vessel allocation costs. R&D expenses increased as planned, and as a result, reduced operating profit by JPY 4 billion, year-on-year, while others worsened by JPY 13.6 billion, mainly due to the booking of quality-related costs.
Regarding the Forex, the negative impact of the appreciation Thai baht was offset by U.S. dollars, euro, and other currencies, resulting in an increase in profit of JPY 7.7 billion. Please turn to page 6. Next, I would like to explain our global sales volume for Q3 FY2023. As in first half of the year, all regions except Japan and North America, had lower volumes than the previous year. This was mainly from delays in vehicle deliveries due to insufficient capacity of the inland transportation in certain regions and the sluggish demand. The global sales volume decreased 7% year-on-year to 585,000 units. So from next page, I will explain the sales status per major regions. Please turn to page 7. First, about the ASEAN region.
The overall demand in ASEAN countries remained below expectations due to inflation, high interest rates, and the tightened automobile loan screening. Price competition has also intensified. In such an environment, the Philippines grew significantly on the back of increasing remittances from overseas workers, declining unemployment in the country, and expansion of sales finance.
...As shown in the slide, our retail sales volume decreased 8% year-on-year to 180,000 units in the ASEAN region, as growth in the Philippines was offset by decline in Thailand, Indonesia, and other countries. In Thailand, where we launched the new Triton, we were severely impacted by the stricter automobile loan screening system, especially in the pickup segment, which, stricter automobile loans screening. So in Thailand, where we launched the new Triton, we were severely impacted by the stricter automobile loan screening system, especially in the pickup segment, which resulted in a 40% year-on-year decline in TIV. As a result, we struggled with both the number of units and the market share.
Going forward, we will consider this as an opportunity to increase sales by sequentially launching products, including the HEV models of the Xpander and the highest grade model of the Triton, which should be less affected by the tightening of loan screening. Similarly, in Indonesia, TIV has fallen below the previous year's level for seven consecutive months, particularly in the second half of the year, due to ongoing inflation and the impact of the presidential election. Amid intensifying price-cutting competition among automakers, Xforce, which began full-scale delivery at the end of 2023, will continue to appeal its value while strengthening sales promotional activities centered on event marketing. Please turn to page 8. Next is about our domestic business. Although the total demand for automobiles in Japan has not reached the pre-COVID level, it has exceeded the previous year's level consecutively since September 2022.
Progress was made in resolving the problem of vehicle supply shortages caused by the semiconductor shortage. We also recorded a significant year-over-year increase as a result of our efforts to eliminate our order backlogs. The Delica Mini, which has made a strong start, has maintained strong sales momentum even after it has been fully launched in the market. By finally adding to our product lineup, the new Triton is a model symbolizing the Mitsubishi Motors-ness. We will effectively improve our corporate structure and build a foundation to shift to value appeal. Please turn to page nine. Next is the situation of our North American business. TIV in the North American region is driven by robust retail sales and an increase in fleet demand. Similarly, we achieved year-over-year growth by improving inventory levels and maintaining sales momentum for our core Outlander series.
In particular, the new Outlander PHEV model, which was fully launched in November 2022, significantly exceeded the previous year's results. Production has generally normalized due to improvements in the supply of semiconductors and other parts. As a result, the competitive environment has been normalizing, and the increase in incentives by each company has become apparent. We will also focus on improving the quality of sales and customer satisfaction, while closely monitoring the trends of each company and ensure a shift to sales that does not rely on incentives to achieve sustainable results. Please turn to page 11. Looking back through the third quarter, FY 2023, it appears that we have overcome COVID-19 and emerged from the component shortage issue, including semiconductors. As a result, the sales competition environment appears to be moving toward normalization.
In addition, weakness in aggregate demand in the mainstay, ASEAN and other regions, has exceeded expectations, and there is a high, heightened risk that, this situation will become, protracted. Our operating environment is, becoming increasingly challenging. On the other hand, we recognize that sustained improvements in selling prices, underpinned our earnings and secured a certain level of margin from, foreign exchange. In light of this macroeconomic environment and the state of competition, we have decided to maintain the profit forecast announced together with the first half 2023 results. Although the business environment remains uncertain, the entire company will make concerted efforts to achieve our forecast. Next, I will present the business highlight for the third quarter of FY 2023. Please turn to page 13.
In Challenge 2025, our midterm plan, we have set the goal of rolling out 12 new models, including 7 electrified vehicles in growth driver and leveraged regions over the next 5 years. From 2023 to 2024, we plan to roll out the Triton, Xforce, and Xpander HEV in the ASEAN region and globally, as shown in the slide. Please turn to page 14. Last December, our Delica Mini won the Design Car of the Year award at Japan Car of the Year 2023-2024, which selects cars with outstanding interior and exterior design. This is the first time for a company to receive this award. In recent years, our aggressive front mask has been the brand language, and our adoption of a lovely facial expression has been highly regarded. Delica Mini is loved by many customers and has achieved more than three times the sales volume of eK X Space. Going forward, we will continue to provide attractive Mitsubishi vehicles that are eco-friendly and provide safety, technology, peace of mind, and comfort under any weather or road surface conditions. Please turn to page 15. As announced in December last year, we started the production of a new Minicab EV, locally named L100 EV, a light commercial electric vehicle at the Mitsubishi Motors Krama Yudha Indonesia
FY 2023 is the first year of Challenge 2025, our midterm business plan. Our business performance is progressing steadily so far. With the continuous launches of new products, we are now ready for the growth phase. In the future, we plan to start full-scale sales of these products and expand those to other regions. We regard the success of new models as an important step toward our sustainable growth. On the other hand, the external environment is becoming increasingly uncertain due to concerns about economic recession in each country and the geopolitical risks. Nevertheless, regardless of the harsh environment, utilizing these new models to increase sales and secure profits in a major challenge, is a major challenge for us.
Based on our past experience, we have a proven track record of overcoming a variety of difficult situations and challenges on a company-wide basis, and we believe that we can demonstrate our real strength in this challenging environment. We will steadily resolve each issue and accumulate results towards the second year of Challenge 2025. Thank you very much for your attention.