Good evening, everyone. I'm Ikeya. We sincerely thank you for your participation in the financial results meeting for the third quarter fiscal 2021, taking time out of your busy schedule. First, I would like to give you a summary of the third quarter results. Beginning in the third quarter, movement restrictions due to the spread of COVID-19 have been gradually eased in each region. On the other hand, production constraints continue due to the shortage of semiconductors, which also have an impact on our sales. In this business environment, we have been improving the quality of our sales and combined with the favorable effects of foreign exchange rates, our earnings have improved significantly year-on-year. Our third quarter year-to-date unit sales increased 21% year-on-year to 687,000 units globally.
Similarly, our net sales increased 49% year-on-year to JPY 1,416.1 billion. Operating profit improved significantly year-on-year to JPY 55.9 billion due to an increase in wholesale sales, the effect of cutting back on discounts and the effects of cost improvements. OP margin was 3.9% continuing to improve from the first half. Ordinary profit was JPY 61.1 billion mainly due to an increase in equity in earnings of affiliates and net income after tax was JPY 44.7 billion, partly due to the payment of taxes. In the third quarter, we recorded net sales of JPY 525.5 billion, operating profit of JPY 30.7 billion, ordinary profit of JPY 34 billion and net income of JPY 23 billion. OP margin improved significantly to 5.8%.
I will explain the factors behind the changes in profit later. Please turn to page four. The slide you see explains the factors behind the year-on-year changes in operating profit for the third quarter fiscal 2021. Volume mix and selling price improved by JPY 60.4 billion due to increased unit sales and the success of measures to improve the quality of sales in each country, mainly in North America. Although advertising and promotional expenses increased in line with the plan, the launch of new models, et cetera, our group strengthened measures to curb incentives, resulting in a year-on-year improvement of JPY 10.6 billion in selling expenses.
Cost reduction saw an overall improvement of JPY 6.5 billion due in part to progress in cost reduction activities as planned and improvements in factory expenses associated with the normalization of operation amid continued raw material price hikes. The effects of structural reforms improved by JPY 18.4 billion due to the curtailment of depreciation and indirect labor costs. R&D expenses have increased year-on-year since the third quarter as planned, but the cumulative total has improved by JPY 2.3 billion year-on-year. Other factors, including an improvement in after-sales business, resulted in an improvement of JPY 7.1 billion. With regard to foreign exchange rates, the yen continued to depreciate, resulting in a positive effect of JPY 37.3 billion year-on-year.
In total, operating profit in the third quarter year-to-date, fiscal 2021 increased substantially by JPY 142.6 billion year-on-year. Please turn to page five. This slide you see explains the factors behind year-on-year changes in the operating profit for the third quarter FY 2021. Volume mix and selling price improved by JPY 17.4 billion year-on-year. Domestic sales fell year-on-year, mainly due to restrained car supply due to the impact of a shortage of semiconductors. However, sales volume increased in North America, Europe, Australia and New Zealand, et cetera, and with favorable mix and selling price resulted in a substantial improvement in the Asia region. Although unit sales increased, the region had a slightly negative effect on operating profits due to a worsening country mix.
In selling expenses, advertising expenses increased as planned, but incentives were kept curbed, resulting in a positive effect of JPY 3.3 billion. In cost reductions, et cetera, raw material price hikes and increased material costs for enhancement of products were offset by cost reduction activities and by curtailing factory expenses, but the overall deterioration was JPY 2.6 billion. As mentioned earlier, R&D expenses increased from the third quarter as planned, causing a deterioration of JPY 2 billion year-on-year. Structural reforms benefited from an improvement of JPY 4.2 billion even in the third quarter. In others, the increase in credit costs to comply with CAFE restrictions was offset to some extent by the improvement in indirect labor costs and after sales profit, and thus resulting in a decrease of JPY 2 billion.
Regarding foreign exchange rates, the overall trend of yen depreciation continued, resulting in a positive effect of JPY 16.5 billion. In total, a significant year-on-year increase of JPY 34.8 billion was recorded in the third quarter alone as well. Please turn to page six. Now I would like to explain our global sales volume for the third quarter FY 2021. Our total sales volume in all regions increased by 21% to 687,000 units. In the following slides, I would like to explain the status of the main regions. Please turn to page seven. From this slide, I would like to explain the status of sales in each of our core markets in North America and Japan. First of all, in ASEAN countries, movement restrictions have been gradually eased, and economic activity in each country has been recovering moderately.
Amid this business environment, unit sales increased 36% year-on-year to 179,000 units. In Thailand, the number of infected persons of COVID-19 peaked in August and gradually declined and recovered to around -11% in the third quarter compared with the same period of the previous fiscal year. Movement restrictions have been eased since September, and event marketing has been resumed. Although our sales have been gradually recovering since the third quarter, our year-to-date sales decreased year-on-year due to the harsh competitive environment and at the end of product cycles. Demand for new vehicles in the Philippines is also on a recovery trend due to the gradual relaxation of behavior restrictions from October onward.
In this environment, we continue to be exposed to severe competition due to the impact of the tightening of bank loans screening and production constraints caused by the shortage of semiconductors. However, we are working to increase unit sales by firmly capturing relatively robust demand for commercial and government fleets and by strengthening sales promotion mainly for the Xpander. The results of these efforts are beginning to appear gradually. In Indonesia, overall demand continued to recover, supported in part by the luxury tax exemption measures extended to the end of December 2021. In addition, the introduction of new models by each OEM and the holding of a GIIAS motor show have stimulated consumers' appetite for purchasing, and the marketplace is showing a big boom. We enjoyed very favorable sales of the new Xpander, which was launched in November.
In addition, sales of commercial models were firm due to strong resource prices and demand for EC of consumer goods. As a result, we ranked third in our market share amid severe supply constraints. In addition, sales in Vietnam, Malaysia and other countries grew in line with the recovery trend in the overall market. We expect this momentum to continue for a while. We will continue to take sales enhancement measures for these countries by watching the market closely. Please turn to page eight. In Australia and New Zealand, which are our core region like ASEAN region, although lockdowns were sporadically implemented in some major metropolitan areas, the impact on automotive sales activity was minimal, and the automobile market continued to be firm. We also steadily accumulated sales, increasing 34% year-on-year to 65,000 units.
In Australia, despite supply shortages such as the Triton due to a shortage of parts, sales increased along with market share, driven by relatively firm supply of the Mirage, the Express, et cetera. In New Zealand, our market share continued to increase from the first half due to increased sales of the ASX, which is relatively unaffected by semiconductor shortages and increased demand for the Eclipse Cross PHEV and the Outlander PHEV, for which subsidies are provided in conjunction with the enforcement of Clean Car Discount. Although uncertainty remains, such as that the number of Omicron variant infections has increased rapidly in Australia, auto demand itself is expected to remain firm. We continue to optimize our model allocation while maximizing the impact of new model launches. Please turn to page nine. Next, I will explain the current status of our North American business.
In the North American market, demand for new vehicles is firm, but unit sales have been sluggish due to a shortage of vehicle supply caused by supply chain disruptions. We achieved a significant year-on-year increase in sales of the new Outlander, which began full-scale sales in April last year. Also in other models, we are restraining discounts and improving profitability. Going forward, despite constraints on vehicle supply due to the impact of the shortage of semiconductors, we will continue to closely monitor the situation, steadily reap the results of new sales methods that actively utilize digital media, further improve sales efficiency and work to maximize the effects of new model introductions with profit. Please turn to page 10. Finally, I will explain the status of our domestic market.
Overall demand in Japan has been recovering at a slow pace due to insufficient vehicle supply caused by the impact of semiconductor constraints and the spread of the COVID-19 infection. Under these circumstances, the new Outlander PHEV model, which was launched on December 16 with great expectations, it got off to a strong start. The great success of the new Outlander PHEV model provided synergies with other models and sales were robust in the third quarter as well.
On the other hand, in the kei car segment, sales dropped due to a shortage of vehicle supply caused by the impacts of chip shortage and suspended production and shipment of eK Space and eK Xs pace from December. We are still uncertain of the business environment, including the impacts of the shortage of chips and the re-expansion of COVID-19 infection by Omicron variant. However, we will firmly appeal the new Outlander PHEV model and Eclipse Cross PHEV, which have been very successful, and link them to the new kei car EV model that we plan to launch in FY 2022. Please turn to page 11. Next, we would like to explain our earnings forecast for FY 2021. Please turn to page 12.
In the third quarter of fiscal year 2021, although the re-expansion of COVID-19 has stabilized to a certain extent, conditions for Monozukuri were severe due to constraints on vehicle supply caused by such factors as a shortage in semiconductors and the impact of soaring raw material and logistics costs. On the other hand, we were able to exceed our plans due to recovering auto demand, particularly in developed countries, and the steady effects of structural reform progressing, improving the quality of sales and the depreciation of the yen. As explained earlier, year-to-date third quarter net income has already exceeded the full-year forecast.
Although there is greater uncertainties about the business environment, including the re-expansion of COVID-19 infection due to the Omicron variant, constraints on the supply of vehicles due to a shortage of semiconductors and tight container transportation, after the first quarter and second quarter, we will revise up our full-year forecast for FY 2021 again, as shown in the slide, taking into account the performance for the third quarter and the yen depreciation trend. Please turn to page 13. The factors behind changes from the FY 2020 actual operating profit to the revised forecast for FY 2021 are shown in the slide. Volume and mixed selling price are expected to increase by a total of JPY 70.7 billion. Sales expenses are expected to have a positive effect of JPY 23.1 billion year-on-year , mainly due to the effect of curbing incentives.
Cost reductions are expected to be a little worse as a whole, although raw material price hikes are basically offset by material cost reduction activities and by curtailing factory expenses. With regards to the effects of structural reforms, we have seen more positive profit effects than expected at the beginning of the fiscal year, and we expect an increase of JPY 21.7 billion. In addition, an increase of JPY 5.0 billion is expected due to an improvement in after-sales P&L. R&D expenses have been increased as planned since the third quarter and are expected to decrease operating profit by JPY 5.8 billion. The impact of foreign exchange rate is expected to be an increase of JPY 50.7 billion based on the current exchange rate level. Please turn to page 14.
The factors behind changes from the previous operating profit forecast to the revised forecast for FY 2021 are shown in the slide. The volume and mix selling price are expected to deteriorate by JPY 4.1 billion in total due to a decline of sales volume caused by the shortage of semiconductors and impact of the suspension of shipments of some models of the kei car segment, as well as worsening of the country mix. Sales expenses are expected to improve by JPY 9 billion due to the curtailment of incentives. Cost reductions are expected to deteriorate by JPY 4.2 billion, mainly due to the impact of raw material price hikes as well as higher prices of semiconductor parts with changes in the supply and demand environment.
In addition, a decrease of JPY 2 billion is expected, mainly due to the worsening of profitability of production subsidiaries. The impact of exchange rate is expected to improve by JPY 11.3 billion, mainly in the US dollars and Thai baht. Please turn to page 15. Although uncertainty persists due to the impact of production cutbacks caused by delays in the supply of auto parts and the re-expansion of COVID-19 by the Omicron variant, we have revised our full-year sales forecast for FY2021 from 903,000 units announced in November to 921,000 units, taking into account the strong sales performance of the new Outlander and the new Outlander PHEV model.
In the current fiscal year, it is very difficult to assess which region or which model will be affected by the delayed supply of semiconductors and other parts, and transfers will occur whenever necessary among regions. Therefore, we will refrain from disclosing the sales volume forecast by region. We appreciate your understanding. Please turn to page 16. Next, we would like to explain our business highlights for third quarter FY 2021. Please turn to page 17. The new Outlander PHEV, which has began sales in Japan on December 16 last year, has been highly regarded by customers, far exceeding our anticipation and has received orders well above our expectations.
Orders have now exceeded 9,000 units, which are about three times our end of January sales target since the launch. The new Outlander PHEV has earned a high reputation for its design and equipment, including designs such as high-tech interiors and the Japan Car of the Year's Technology Car of the Year award. The new Outlander PHEV model launched in Japan will be successfully rolled out globally in the future to enhance our brand value. The new Xpander, which was launched in the Indonesian market in November, continued to enjoy favorable orders that exceeded the plan, supported by a high praise of its superior product strength and luxury tax exemptions. Going forward, we will continue to leverage this model to increase our fans and strive to expand sales with earnings, while closely monitoring market trends. Please turn to page 18.
We will continue to expand our lineup of electric vehicles as one of our responses to the coming carbon neutrality. With regard to our PHEV model lineup, in addition to the Outlander PHEV model, we added the Eclipse Cross PHEV in December 2020. In December of last year, we introduced a new Outlander PHEV model equipped with the next generation PHEV system. We are preparing for the launch of a new kei car EV model this spring. We are also preparing for the relaunch of light commercial EVs. We will continue to closely monitor the regulations, regional characteristics and infrastructure development of each region and country, and accelerate our actions to address carbon neutrality in line with the actual conditions of each region and country. Please turn to page 19.
We have decided to resume production and sale of a Minicab-MiEV, the only light commercial EV van in Japan, around autumn 2022. We will be ready to revive the country's only light commercial EV and help our customers in their carbon neutrality. This model has been adopted by many companies that routinely use commercial vans in their businesses, and the evaluation of this model has changed dramatically over the past year, including the reduced carbon dioxide and hazardous emissions during use, the strong driving performance and quietness unique to EVs, and the equivalent load capacity to gasoline vehicles. Recently, there has been a flood of inquiries from customers and companies in a wide range of industries such as the companies on the slide have introduced the Minicab-MiEV on a trial basis, and we are also conducting demonstration tests in collaboration with them.
Going forward, we will continue to supply product in line with customers' needs by enhancing product quality and revising prices to play the most important role for companies in their decarbonization efforts. Next page, please. As in the previous year, the environment surrounding us was to be uncertain due to the re-expansion of COVID-19 and tight supply and demand triggered by the shortage of semiconductors during 2021. It seems to take a considerable amount of time to dispel these uncertainties. On the other hand, our full year forecast has been revised upward for the third time due to the steady effects of structural reforms and improvements in the quality of sales as well as favorable exchange rates.
In terms of product, we have received orders exceeding our target for the new Outlander, which was launched in North America in April last year, and the new Outlander PHEV model, which was launched in Japan in December, both of which are evaluated as premium SUVs, deserves to be called Mitsubishi Motors' flagship models. In the ASEAN market, we launched the new Xpander in Indonesia in November last year, and orders for this model have already been received at a faster pace than anticipated. Going forward, we expect the environment surrounding us to remain challenging due to factors such as the shortage of semiconductors and other components, the resurgence of COVID-19 infection, mainly by Omicron variant, and the shortage of transportation containers.
We will accelerate the strengthening of the corporate structure in order to shift to the next phase smoothly and be able to withstand all changes in the business environment. Thank you for your attention.