I'm Ikeya speaking, the Executive Vice President. Thank you very much for attending in our financial results presentation. COVID-19 was prevalent throughout the year. The risk of severe diseases has been controlled, thanks to improved vaccination rates and the development of drugs. Under these circumstances, countries around the world are easing infection control, and the socioeconomic activities are gradually beginning to normalize. On the other hand, the situation in Russia, Ukraine remains no way out, and logistical disruptions, soaring energy prices, inflation reaching levels not seen in decades, and sharply rising interest rates to curb such inflation have made it difficult to take control of the business environment. Thanks to the achievements of improving sales quality in all regions and in promoting the margin improvement strategy and the effect of yen depreciation, our FY2022 results improved significantly year-on-year.
Net sales increased 21% year-on-year to JPY 2,458.1 billion . Operating profit more than doubled to JPY 190.5 billion , and OP margin rose 3.4 percentage points year-on-year to 7.7%. Operating- the high since FY 2015. Ordinary profit was due to tax payments and extraordinary losses mainly related to the Russian and Chinese businesses, was JPY 168.7 billion . In the fourth quarter alone, we recorded net sales of JPY 652.8 billion and operating profit of JPY 36.8 billion , an ordinary profit of JPY 27.3 billion , and a net income of JPY 37.9 billion . The OP margin was 5.6%. The year-end dividend payment will be resumed at JPY 5 per share. Please turn to page 4. This slide explains the factors behind year-on-year changes in operating profit for the full year of FY 2022.
The volume and the mix selling price were negatively impacted due to the year-on-year decline in shipment volume, but the improvement in mix selling price through promoting a margin improvement strategy, et cetera, resulted in a total turnaround of JPY 59.2 billion . While advertising expense increased in line with the plan, sales expenses improved by JPY 21.4 billion due to the effect of curbing incentives throughout the year. Procurement and shipment costs, deterioration in material costs due to soaring raw material prices was offset to a certain extent by cost reduction efforts. However, worsening transportation costs due to vessel shortage and worsening factory expenses due to soaring energy and labor costs resulted in a total negative factor of JPY 75.1 billion . R&D expenses increased for the introduction of new models, resulting in a negative factor of JPY 16.5 billion in total.
Others, mainly due to profit improvements in domestic subsidiaries after sales and various other areas, improved by JPY 14.3 billion . For FX, the yen depreciated throughout the fiscal year, resulting in a positive effect of JPY 99.9 billion year-on-year. In total, operating profit for FY 2022 increased significantly by JPY 103.2 billion . Please turn to page 5. This slide explains the factors behind the year-on-year changes in operating profit for the fourth quarter of FY 2022. The total volume and the mix and selling price showed a significant year-on-year drop in shipment volume, mainly in North America and ASEAN countries, which were affected by car supply constraints caused by semiconductor supply shortages, as well as in Oceania, where supply delays occurred due to vessel shortages.
On the other hand, thanks to the success of promoting margin improvement strategy, mix and selling prices improved significantly, though total volume and mix selling price resulted in a JPY 5.8 billion increase in operating profit. Selling expenses had a positive effect of JPY 4.2 billion, mainly due to the effect of cutting incentives. Procurement and shipment costs were a negative factor of JPY 23.3 billion due to worsening factory expenses and transportation costs, although material cost hike due to raw material prices was partially absorbed by material cost reduction activities. R&D expenses increased by JPY 4.8 billion, in line with the plan to prepare for the new model launches. Mainly due to the deterioration in after-sales and increases of indirect labor costs and general expenses, other made a JPY 9 billion negative impact.
Foreign exchange rate fluctuations were a positive factor of JPY 32.5 billion, as the yen generally depreciated against major currencies. In total, Q4 saw a JPY 5.4 billion increase in profit year- on- year. Please go to page 6. Next, I will explain the retail sale volume for the full year FY2022. Overall, retail sales volume was 834,000 units, down 11% year- on- year. In ASEAN, our main market, the first half of last year was affected by the shortage of semiconductors, as well as production constraints imposed by the Shanghai lockdown. In the second half, the sales environment became increasingly difficult toward the end of the fiscal year as intermittent interest rate hikes, inflation, and other factors reduced consumers' willingness to purchase.
Under these circumstances, we focused on segments with less supply constraints and worked to eliminate our order backlog, resulted in a 5% year-on-year increase to 262,000 units. In Australia and New Zealand, despite the shift in demand from ICE vehicles to EVs due to the New Zealand Clean Car Discount policy, orders in general remained firm. On the other hand, logistic issues, including vessel shortages, became more serious, and the car supply shortage became more noticeable, resulted in a year-on-year decrease in sales volume. In Australia particularly, while orders remained strong, back orders continued to pile up due to a lack of vehicle supply. We will continue to improve the situation. Our home market, Japan, although there are production constraints due to the shortage of semiconductors, this has been on a recovery trend since September 2022.
In addition to the strong new Outlander PHEV, we launched eK X EV in June, and we launched the Minicab-MiEV in November, expanded the EV product lineup, one of our strengths. The pre-orders for the new Delica Mini, began in January 2023, have also been strong. In North America, although there was a decline in demand until last summer due to a shortage of car supply caused by semiconductor supply issues, there have been signs of recovery in demand since then. Aiming at limited inventories, we curbed fleet sales and prioritized dealer sales, resulted in a 15% decrease year- on- year. As for other regions such as China, where we struggled in the intensified competition, Europe, where the model lineup was reduced and the vehicle supply has been suspended in Russia, sales in both regions were down significantly from the previous year.
Sales in Latin America and the Middle East and Africa increased slightly. Page 8 shows the forecast. In FY2022, through the margin improvement strategy as well as favorable exchange rates, we were able to overcome supply constraints and the raw material and the transportation cost hikes and achieved a significant increase in profit. In FY2023, the impact of semiconductor and the vessel shortages will remain despite the recovery. In addition, concerns about the macroeconomic slowdown and further instability will also remain. We assume that the business environment will remain uncertain. In this environment, we intend to secure stable earnings based on the management structure that has become leaner and more agile under the previous midterm plan, while responding flexibly to changes in the external environment and strengthening investments for the next stage of growth.
Specifically, we will strive to curb costs by eliminating waste, and at the same time, we will put the efforts to increase sales volume by recovering production and securing vessel capacity in response to the improved supply of semiconductors and addressing the shortage of car supply. In addition, we will ensure the necessary investment for launching new models on schedule so that we can introduce high-quality products as planned and expand our sales. We will also continue to pursue our margin improvement and by reinforcing the Mitsubishi Motors brand, strengthen our value-appealing business as well. Through these efforts, as shown in the slide, we aim to secure net sales of JPY 2.7 trillion, operating profit of JPY 150 billion, ordinary profit of JPY 150 billion, and a net income of JPY 100 billion.
To our regret, we have stopped paying dividends due to the negative distributable amount on a non-consolidated basis required for dividend payments since the end of FY 2019. However, as announced in our new midterm plan, Challenge 2025, in March, as we are now on track to pay a stable dividend from FY 2023 and onward, we have decided to resume dividend payments starting from the year-end dividend of JPY 5 per share for FY 2022. For FY 2023, based on our basic policy of maintaining stable dividends over the long term, we plan to pay an annual dividend of JPY 10 per share after comprehensively considering our future business and investment plans. Based on the assumption to keep paying stable dividends, we intend to determine its dividend policy while assessing the balance between changes in the business environment, investing in growth for the future, and the need to build up equity capital.
Please turn to page 10. This slide shows the factors behind the transition in the operating profit forecast for FY 2023 from the previous year. As for the impact of the volume mix selling price, despite the limited car supply due to the shortage of semiconductors and shipping capacity, by further expanding sales of the new Outlander, maximizing the effect of new models scheduled for launch, and promoting the improvement of sales quality, we assume a total positive impact of JPY 115.8 billion. Mainly due to an expected increase in incentives as a result of changes in the competitive environment and an increase in advertising expenses, mainly for new model launches. Selling expenses are expected to increase by JPY 37.9 billion year-on-year.
As for material under transportation costs, due to negative factors such as soaring material costs due to inflation and worsening factory expenses caused by rising energy and labor costs, we expect a total negative impact of JPY 27.8 billion. R&D expenses are on an increasing trend toward the launch of new models scheduled for this fiscal year and beyond, resulting in a negative factor of JPY 11.3 billion in profit. Regarding others, we expect increases in quality related to cost, indirect labor cost, and the general expenses due to worldwide inflation, assuming to have negative impact of JPY 28.7 billion in profit. Foreign exchange rates are expected to have a negative impact of JPY 15.6 billion based on the current exchange rate. Please turn to page 11. in FY 2023, we plan to launch a series of new models that embody the Mitsubishi-ness, mainly in the ASEAN region.
Contribution of the Delica Mini, which has made a strong start to Japan sales growth, and expansion of the new Outlander. We are forecasting vehicle sales of 917,000 units globally. Next, CEO, Mr. Kato, will explain the key initiatives for achieving the plan. Kato-san, please.
Please turn to page 13. on March 10th, we announced our new midterm business plan, Challenge 2025. This slide shows the major management KPIs for a single fiscal year in chronological order from FY 2019 onward, as presented at the time of the announcement, with the current fiscal year's forecast newly added.
In the final year of the new midterm plan, we plan to secure the profit and free cash flow shown here after absorbing an annual increase of about JPY 50 billion in R&D expenses from the FY 2022 results and an increase of about JPY 25 billion in depreciation expense due to increased CapEx and other cost increases, including advertising expenses. Thus, in FY 2023, we must continue to secure solid earnings and cash flow while accelerating investment. In addition to the success of new models that are scheduled to be launched, we believe that on the region of access, growth in ASEAN and improved profitability of domestic operations will be the key to achieving our goals. Please turn to page 14. First, let me explain our business in the ASEAN region.
Although there is some variation in total demand in ASEAN countries, we expect that TIV in the five major countries will remain at about the same level as in the previous year due to inflation and rising interest rates. In this environment, we are targeting an approximately 19% increase in vehicle sales volume to 311,000 units. TIV in Thailand is expected to recover moderately. In July, we will finally launch the long-awaited new Triton. To maximize sale after the launch, we will manage smooth inventory clearance of the older Triton, and at the same time, we will further expand our market share in the largest pickup segment in the Thai market by promoting marketing activities tailored to each region and segment, which we have put effort on since last fiscal year.
In the second half of the year, we plan to introduce our first HEV model, the Xpander HEV, which will be the first HEV model for our company, and we will continue to enhance the lineup of xEVs, starting with this model. At the same time, we will strengthen the foundation of our sales and enhance the sales activities of each dealership through digital tool and marketing to aim for higher overall market share. TIV in Indonesia is expected to continue to be weak in the first half of the year and gradually recovering in the second half of the fiscal year, with a slight decrease from FY 2022. Under such circumstances, we aim to expand our market share by strengthening the customer touch points, including online. In addition to sales promotion events centered on event marketing.
In addition, this fiscal year, we plan to strengthen the Passenger Car segment and increase sales volume by introducing a new mass production model of the XFC Concept, which is a strategic vehicle for the ASEAN region. In the Philippines, despite the slowdown in demand for new cars in neighboring countries, our recent strong demand trends are continuing, and it is predicted that the TIV level will exceed the pre-COVID-19 level. We will expand our sales network, which includes leadership improvement through sales staff training, and at the same time, we will continue our 60th anniversary promotions and increase touchpoints with customers through sales of limited edition models and revitalized events. We will also expand the sales of existing models and maximize the sales of new models that are scheduled to be introduced, thereby further expanding our market share.
TIV in Vietnam has been deteriorating since October last year, and although it is expected to recover from the second half of FY 2023, the situation is still uncertain. We will focus on promoting sales of the Xpander, which has been well-received, by increasing contact with the customers and dealers through a variety of events. We will then ensure successful rollout of the new Xpander Cross. Also, we will further expand our dealer network. In Malaysia, TIV is expected to decline by about 15%, partly due to the government's economic stimulus measures, such as the SST, or Sales and Service Tax exemption, implemented in FY 2022. To maximize the strong sales of our mainstay products, Xpander and Triton, we will aggressively hold events such as test drives in addition to dealer events. Please proceed to page 15. Next, I will explain our priority measures for domestic business.
Although TIV in Japan has been on a recovery trend since FY 2022, the shortage of semiconductor supply has not yet been resolved, and the production is expected to remain affected. In addition to the electric vehicles lineup, such as the new Outlander, a PHEV model, Eclipse Cross PHEV model, and the eK X EV, the addition of the new Delica Mini to the product lineup will further accentuate Mitsubishi Motors' [inaudible]. The new Delica Mini, which is scheduled to go on sale in May, is a car that meets the needs of customers who want a car like this and has made a good start with cumulative orders exceeding 10,000 units since pre-orders began. Going forward, we will continue to promote the Delica brand through the product series appeal with the Delica D:5, which will mark the 51st anniversary of its launch, to achieve a synergistic effect.
Looking ahead to mid to long-term growth, we will develop and strengthen our foundation in every aspect of our product sales and structure to shift from price appeal to product value appeal. Please turn to page 16. Next, I'd like to explain our strategies in each region. In Oceania, where there were shortages and serious delays in the supply of vehicles in the previous fiscal year, we are working urgently to improve back orders and establish a brand as PHEV leader through various promotions. In Europe, the model lineup will be strengthened with the addition of Colt to ASX, which was launched in April. We ensure the success of each rollout and improve the customer experience. In North America, although there is a downside risk due to rising interest rates and the economic downturn, TIV is forecasted to be generally on par with the previous fiscal year.
On the other hand, market competition is expected to intensify again as each OEM recovers production. In this environment, we will strengthen our sales initiatives to maintain the strong sales momentum of the new Outlander series. In addition, we will promote brand reconstruction by improving customer service, et cetera, while also enhancing online sales and strengthening digital media marketing. In other leverage regions, such as the Middle East, Africa, and Latin America, we will focus on segments where demand is strong and take on the challenges of selling our products to private customers by appealing to our product value. Please turn to page 17. As stated in our midterm plan announcement, we plan to introduce 1-2 new models each year starting this fiscal year. This slide shows the product rollout schedule for the three years of the new midterm plan. Please turn to page 18.
The new models scheduled for launch during FY 2023 are shown on this slide. This fiscal year, we will rollout an unusually large number of new models. Particularly in our mainstay ASEAN region, we will leverage the successive launch of new vehicles to strengthen the Mitsubishi brand. The new ASX, which has been in full-scale sales in Europe since April, is receiving a steady increase in orders and has exceeded our expectations. In Europe, the new Colt will be added in fall to strengthen our product lineup. In Japan, the new Delica Mini was officially announced in April, and pre-orders began in January. It has already received orders for more than 10,000 units.
The car's fearless and charming expression, SUV-like styling with a powerful driving appeal, and a spacious and comfortable interior that is hard to believe for a mini car, have been very well received and are attracting a great deal of attention from customers. In July, the new Triton will finally be launched, and was exhibited at the Mitsubishi XRT Concept at the Bangkok International Motor Show 2023 in March, where its exterior design, particularly the front end, was well received and got a great response. The all-new sixth generation Triton, which has undergone full model change in about nine years, will be launched in Thailand this summer, followed by an expansion to ASEAN countries, Oceania, and other markets. In addition, we are planning to accelerate our business in ASEAN countries and Oceania by launching the mass production XFC Concept and the Xpander HEV, our first HEV model, shortly.
Next page, please. Last fiscal year, the entire company worked together to tackle all issues, including efforts to reduce costs and promote sales quality improvement activities in each country. Coupled with foreign exchange settlement, we were able to end the year with a record high profit. At the same time, we believe that the company's potential has also come along, and we are ready to enter a new stage. On the other hand, business environment surrounding our company continues to be uncertain and unstable. There is no time to wait for the development of electric vehicles and carbon neutrality, and there are fears of a global economic recession due to price hikes caused by soaring energy and raw material prices, and the tightening of monetary policies to curb such hikes. As the world changes by the minute, we must also change ourselves.
We also need to further strengthen our management foundation to be prepared to meet the challenges of the new era. Our midterm business plan, Challenge 2025, has been formulated to accomplish these challenges. In the current fiscal year, the first year of the plan, we expect to still face a harsh business environment, but we need to secure profits by establishing a lean and agile management structure while accelerating the investments necessary for the next era of growth. We will also build long-term relationships of trust with our customers and promote our brand value through products and technologies that are unique to Mitsubishi Motors. This fiscal year, we have entered a new stage.
We will achieve our FY 2023 target, the first year of our midterm plan, by demonstrating the potential that we have cultivated thus far and by working as one to take on the challenges of further progress and growth in the next era. Thank you very much for your attention.