This is Ikeya speaking, the Vice President. Good evening, everybody. Thank you for taking time out of your busy schedule to participate in the, our, FY 2022 results meeting. The environment surrounding us is becoming increasingly uncertain, including the situation in Russia and Ukraine, where the exit is still unknown and the resulting disruption in logistics, soaring energy prices, as well as facing global inflation at the level not seen in recent decades and the sharp rise in interest rates to control them and also concerns over the global recession. In this business environment, our business performance showed a significant year-over-year improvement, mainly due to continued efforts to improve the quality of sales and to improve our profitability despite the JPY depreciation toward the end of the year.
The net sales for the Q3 FY 2022 increased 27% year on year to JPY 1,805.3 billion. The operating profit improved significantly year over year to JPY 153.7 billion. The OP margin remained at a high level, 8.5%. The ordinary profit was JPY 154.7 billion due in part to the impact of foreign exchange rate. Net income was JPY 130.8 billion. In the third quarter alone, net sales were JPY 647.1 billion. Operating profit was JPY 69.1 billion. The OP margin was 10.7%. The ordinary profit was JPY 53.4 billion. The net income was JPY 48.1 billion.
The retail sales totaled 630,000 units on a global basis. Please turn to page four. This slide explains the factors behind year-over-year changes in the operating profit for the third quarter FY 2022. The volume and mix selling price improved, JPY 53.4 billion, mainly due to increase in its sales in ASEAN and other regions which have been our focus and also a highly profitable region and also the progress we made to improve selling prices in each country. With regard to sales expenses, despite an increase in advertising expenses from the normalization of economic activities in each country, sales expenses continued to improve by JPY 17.2 billion in total, due to a large decrease in incentives mainly in North America.
In procurement cost, shipping cost, impact of rising raw material prices was partially offset by procurement cost reduction activities. Together with the increases in transportation cost and factory expenses, the procurement cost, shipping cost resulted in overall deterioration of JPY 54.5 billion. The R&D expenses increased as planned to prepare for the introduction of new models, starting from next fiscal year onwards, with a year-on-year increase of JPY 11.7 billion. In other expenses, an improvement in after sales and domestic subsidiary performance resulted in a positive impact of JPY 13.2 billion. With regard to Forex rate, as you see on the slide, the impact of the U.S. dollars and Australian dollars were significant and had a positive effect of JPY 80.2 billion year-over-year.
Although there was a tailwind in the exchange rate, we have managed to absorb increase, this immaterial cost, logistics cost, and R&D cost by carefully selling our products mainly in our focus regions amid vehicle supply constraints and pursuing strategy to improve our net revenue. As a result, the operating profit increased by JPY 97.8 billion year-on-year. Even excluding the Forex impact, our profit increased by nearly JPY 18 billion. Next page five. This slide explains the factors behind year-on-year changes in the operating profit for the third quarter of fiscal 2022.
The volume and mix selling price improved by JPY 15.2 billion, thanks to increased sales in ASEAN, which are focus, which have been our focus and also a highly profitable region as well as effects of improved selling prices in some regions. Sales expenses improved by a total of JPY 7.3 billion, mainly due to decrease in incentives in North America and Japan. Procurement cost and shipping costs deteriorated by JPY 19 billion in total due to efforts of procurement cost reduction activities, which absorbed a raw material price hike and deterioration in factory expenses and logistic costs. R&D expenses increased as planned and as a result, deteriorated by JPY 3.4 billion year-on-year. Others improved by JPY 7.7 billion, mainly due to an improvement in after-sales business and domestic subsidiaries performance.
With regard to foreign exchange rate, the overall trend of yen's depreciation continued, and the deterioration in the cost currency Thai baht was reversed in other currencies, including the U.S. dollars and Australian dollars, resulting in the positive effects of JPY 30.6 billion year-on-year. In total, the operating profit increased by JPY 38.4 billion year-on-year. As in the cumulative third quarter, profits continued to increase even without the impact of exchange rate. Please turn to page six. Next, I would like to explain our global sales volume for the third quarter FY 2022. The retail sales were 630,000 units, down 8% year-over-year, mainly due to the impact of constraints on production volume caused by a shortage of semiconductors and other parts, as well as a shortage of vessel availability.
The decline was substantial, particularly in China, which maintained a zero-COVID policy, and in Europe due to a smaller model line-up as well as the impact of the suspended car supply due to the Russian and Ukraine issues. The sales volumes in North America were also significantly impacted by the car supply shortages. From the next page, I would like to discuss the sales status of our core market in North America as well as Japan. Please turn to page seven. First of all, I would like to explain our mainstay ASEAN region. In cumulative 2023, the retail volume increased by 17,000 units, which is a driver of improved OP margin. First, Thailand. Thailand completely abolished immigration restrictions in October last year and has been accepting more tourists, therefore, we expected the market to recover.
The demand did not fully recover due to factors such as flooding in some regions and the decline in purchasing power caused by inflation. We achieved year-on-year growth in unit sales of, with our core models such as Xpander and Pajero Sport and secured almost the same market share as in the previous year amid an increasingly harsh environment with competitors introducing new models. We continue to focus on improving the quality of sales, introducing digital tools, strengthening our sales platform and prepare for new models that are to be launched from next fiscal year onwards. In Indonesia, the demand slowed mainly in the passenger car segment because of the intermittent interest rate hike since last September, inflation and fuel prices fuel price hike resulting from the reduced fuel subsidies affecting on the consumer sentiment.
On the other hand, the demand for the commercial vehicle segment remained steady as coal prices and resource related prices remained high. We do not follow the intensifying price competition, but we will carefully communicate to our customers focusing on event marketing, which we excel at. As a result, our unit sales have been gradually increasing along with the new Xpander Cross. Meanwhile, the commercial vehicle segment, although the orders were firm, retail sales declined due to vehicle supply constraints and also delay in getting approval for TPT import quota. The import quota issue has already been resolved and that will contribute to the retail sales in the January-March period. While closely monitoring the uncertain macroeconomic environment, we will continue to implement appropriate sales measures, striking the balance between the sales volume, profit and loss and market share.
In the Philippines, despite the tightening of monetary policy by the Central Bank due to the continued rise in policy interest rate, that is an attempt to control the highest level of inflation and for the first time in 14 years. Also the consumer sentiment improved due to an increase in remittance from migrant workers and also decline in unemployment rate. Those have supported people's willingness to purchase automobiles. In addition to strong orders for the new Xpander, which was launched in last May and the sales of Mirage and Mirage G4 were significantly higher than planned due to relaxation of the bank loan examination. Amid the robust demand, we will continue to experience nervousness because of unstable supply and availability of fresh inventory affecting the sales performance.
However, we will strive to expand sales by strengthening our face-to-face sales, which are gradually coming back. Next, Vietnam. The market as a whole is slightly sluggish due to a reaction to the last minute surge in demand from April to May last year. However, we enjoyed favorable sales of the new Xpander, which was launched in last July, and both sales volume and market share expanded. We will continue to have the new Xpander as our core model and will aim to achieve our full year plan by expanding sales of the Triton, which is performing well with relatively stable supply and inventory, and also Outlander, which is performing well since we introduced the annual change model. The Malaysian market continues to be firm, and we continue to see strong sales. The order backlog has been gradually resolved. Next page eight.
In Australia, the overall demand improved to the fiscal 2019 level when the impact of the COVID was minimal. In this environment, we were significantly affected by car supply constraints similar to peers. We made our every effort to eliminate vehicle supply constraints by negotiating with logistics companies and changing equipment specifications to avoid the restricted part supply portions. In addition, the new Outlander has been extremely popular, resulting sales increase year-on-year basis. The vehicle supply constraints continue, and we still have many back orders. We will work to minimize order cancellations through meticulous follow up for customers who have been waiting for a long time or who have experienced significant delivery delays. Let me continue.
In New Zealand, overall demand was driven by PHEV EV models, boosted by the Clean Car Discount initiative. On the other hand, total demand fell below the previous year due to a decline in consumer sentiment in the background of rising inflation rate and a decline in demand in the commercial vehicle segment, which has a large amount of CO2 emissions due to the impact of the introduction of CCD fee program. Under these circumstances, we gained our market share year over- on year by strengthening sales of Eclipse Cross PHEV model and Outlander PHEV models, which are subsidized by the CCD program from the beginning of FY 2022. Going forward, we will continue to focus on supplying PHEV series, which are in strong demand and conduct promotional activities related to PHEV to drive its market expansion as the PHEV leader. Please turn to page nine.
Next, I would like to talk about the current status of our North American business. In the North American market, it has not recovered yet due to a decline in demand caused by the shortage of vehicle supplies that was caused by the semiconductor supply constraints since the previous fiscal year. While cumulative Q3 sales volume have remained negative compared to the previous year, total demand in the September-December quarter has exceeded against the previous year. We have begun to see signs of recovery from the sales decline due to the inventory shortage. We prioritize to deliver the limited inventories we had to dealers for retail sales in the first half of FY 2022, which has resulted in a significant decrease in the fleet sales from the previous year, resulting in a decrease in total retail sales year-over-year.
Sales of Outlander, our main core model, also was sluggish due to a lack of inventory, but inventory conditions have begun to improve since Q3. We will strengthen our sales by conducting marketing activities for ICE and PHEV models together. While a negative impact on the economy from the rapid monetary tightening by FRB is becoming a concern, some manufacturers are raising incentives after seeing inventories normalizing, resulting in intensifying the competitive environment. We strive to maintain the quality of sales that was improved by the new Outlander and secure sales volume appropriate for our scale of business. Please turn to page 10. Finally, I would like to explain the status of our domestic market. Overall demand in Japan has surpassed 100% year-on-year for four consecutive months since September, showing some signs of recovery, although it is little by little.
In addition to the new Outlander PHEV model and Eclipse Cross PHEV model, we expand our electric model lineup by launching mini car eK X EV and Minicab-MiEV, which resumed sales in November. We also enjoyed strong orders for all of those products. On the other hand, due to vehicle supply constraints coming from the shortage of semiconductors, we are actually making customers wait. Going forward, we do not expect material cost hike and also semiconductor shortage problem will be brought under control in the short term, and we expect this will continue to have an impact on our production and unit sales. In this environment, we will strive to further increase sales by introducing products that embody the characteristics of Mitsubishi Motors, in addition to the long selling of PHEV and BEV and other electric vehicle series.
We will also strive to improve the quality of sales by focusing on enhancing servicing quality and customer service quality. Please turn to page 12.
In the third quarter of fiscal 2022, we continued to maintain strong momentum through the first half, achieving favorable results. Although there was a favorable impact from the foreign exchange rates, we believe this is a result of our concerted company-wide efforts to resolve issues. Nevertheless, uncertainties have been growing to an unprecedented level due to the factors like continued unstable operating environment and the possibility of worried global economic downturn, as well as the volatile FX market. Based on a careful consideration for the impact of these factors, the full year earnings forecast revised in November will remain unchanged. Only net sales have been revised from JPY 2.53 trillion to JPY 2.48 trillion, in line with the revision of the wholesale volume. Please turn to page 13.
We have revised analysis of the operating profit variance forecast for FY2022 from the previous fiscal year, as shown on the slide, in accordance with the current situation. Despite the attainment from the exchange rate, we are expecting to counteract the impact of soaring material costs by our sales efforts. Regarding the impact of volume and mix selling prices, the forecast for the wholesale has been revised to reflect the impact of the shortages of vehicle supply to date, and the overall positive impact of JPY 75.8 billion is affirmed. With regard to sales expenses, the effect of curbing the amount of incentives has been more sustained than expected, and we expect an upturn of JPY 15.6 billion in total.
In the procurement and shipping costs, although we will pursue the procurement cost reduction activities as planned, we expect a total deterioration of JPY 94.6 billion, and due to the rise in raw material prices, soaring material costs, including semiconductors and the deterioration in transportation and factory-related costs. R&D expenses are projected to increase as planned, and we anticipate an increase with JPY 11.3 billion. In others, we anticipate a worsening of JPY 13.6 billion on the assumption that personal expenses and local procurement parts costs will worsen and general expenses will increase. As you can see, the impact of exchange rates has been revised in line with the current exchange rate level and an upturn of JPY 110.8 billion is expected. Please turn to page 14.
As a result of reviewing the factors being changed in the operating profit forecast for FY 2022, the elements that have changed will be as shown on the slide. Regarding the impact of volume and mix and selling prices, we have revised our forecast for wholesale to reflect the impact of the vehicle shortage to date. As a result, we have seen a deterioration of JPY 6 billion from the volume. Sales expenses are expected to improve by JPY 7 billion, reflecting the sustained effort of curbing the amount of incentives amid the vehicle supply shortage.
The impact from the foreign exchange rates is expected to be JPY 1 billion worth, considering the factors such as appreciation of yen following an expected amount announcement for the modification of the monetary easing at the Bank of Japan meeting held in last December amid the peaking out of the prolonged appreciation of U.S. dollars. The other elements are generally in line with the previous analysis. Please go to page 15. Due to the shortage of semiconductors and other parts, production constraints were more widely affected than initially estimated, and the worldwide shortage of vessels also impacted. As a result, we revised our sales volume forecast from 908,000 units to 866,000 units.
Mainly, we have changed our forecast in China, where the demand remains sluggish due to the government remained the zero COVID policy until the end of last year, and in ASEAN and North America, where the impact of vehicle supply shortages were relatively large due to the lockdown in Shanghai and the semiconductor shortage. The vehicle supply shortages, despite the signs of recovery, are in an unstable condition, and we are still facing the difficulties in handling. However, we are making every effort to achieve our revised sales volume forecast by carefully selling attractive lineups that embody Mitsubishi Motors' uniqueness, such as eK cross EV, Outlander and Outlander PHEV, which have been steadily rolling out globally, and Xpander. Please turn to page 17 about the business highlights.
The all-new eK X EV, which has been well received since it was launched in last May, has won the 2022 to 2023 Japan Car of the Year and the K Car of the Year, organized by the Japan Car of the Year Executive Committee. This award, together with the Car of the Year 2022 and 2022-23 award from the Japan Automotive Hall of Fame and the RJC Car of the Year for 2022 to 2023, run by the Automotive Researchers Conference of Japan, or RJC, made us a triple crown winner in Japan, which is a great honor for us. We believe that these results are the evidence that the electrification technology that we have honed over the years and our underlying strength in car manufacturing have been highly evaluated.
We will continue to deliver vehicles that embody Mitsubishi Motors'ness, a combination of safety, security, comfort, and environmental friendliness, while contributing to the realization of a carbon neutral society. Please turn to page 18. Mitsubishi Ralliart, which received technical support from us, participated in the Asia Cross Country Rally, or AXCR 2022, that ran from November 25th-26th in Thailand and Cambodia with the Triton, which is a Group T1 prototype cross country vehicle. One of the two finished in the first place and another finished in the fifth place. For this year's AXCR, we built on the high reliability and durability of the Triton by tuning the engine and chassis and entered the rally with specifications relatively close to the production car. Even so, the two Triton rally cars delivered powerful driving and brought the superb performance.
We'd like to feed the knowledge we gained through our participation in the AXCR back into the development of production vehicles and lead to be Mitsubishi vehicles that are even tougher, more powerful, and more reliable. Please turn to page 19. On Friday, January 13th to Sunday, January 15th, we showcased our new Delica Mini light super height-wagon at the Tokyo Auto Salon 2023, one of the largest customer car event in Japan. The new Delica Mini is a powerful styling light super height-wagon unique to SUV with a design theme of a daily adventure.
With the growing popularity of outdoor leisure in the recent years, the concept of a Delica series will be filled with light super height wagon. The new Delica Mini will begin to sell in coming May. We started the reservation orders on Friday, January 13th, and have already received around 4,000 orders, which we made a good start. The new Delica Mini is scheduled to be exhibited at the Osaka Auto Messe 2023 at INTEX Osaka on February 10th to 12th. The Mitsubishi Motors booth will continue to propose the appeal of environmentally friendly, safe, secure, and comfortable Mitsubishi vehicles with the theme of the next era adventure. The final page 20. Three years have passed since the spread of COVID-19 infections, but it seems that we are finally heading towards the end in conjunction with the improvement in the vaccination ratio.
On the other hand, the macro environment surrounding us seems to be increasingly uncertain due to the situation in Russia and Ukraine, where there are no prospects for solution. Energy prices, which are rising rapidly as a result, raw material prices soaring, inflation at unprecedented levels, rapid rises in interest rates to curb inflation and concerns about the future economic downturn. The environment surrounding the automotive industry itself is also changing on a daily basis. While we still cannot be optimistic, the semiconductor supply system is gradually enhancing. The global shortage of vessels is, however, not showing a sign of subsiding, and it is likely to take certain amount of time to resolve the shortage in vehicle supply. Under these circumstances, our performance has improved substantially year-over-year due to the benefits of our efforts to improve profitability, which we have been pursuing since last year.
Although the environment surrounding us is changing day by day and difficult to deal with, we will continue to make every effort to further improve our profitability and achieve the forecast for FY 2022, the final year of the current midterm plan. Thank you.