Mitsubishi Motors Production Plan Up - May Build New North American Factory

TOKYO January 23, 2003; Mitsubishi Motors plans to increase production in North America and is considering building a new factory there, the company said Thursday.

Japan's fourth-largest car maker also said it aims to boost passenger-car sales by 11% this year in North America.

Mitsubishi Motors currently exports from Japan most of the cars it sells in North America. It has boosted its sales in the region sharply in recent months through enhanced marketing efforts.

Mitsubishi Motors is 37.3%-owned by DaimlerChrysler AG .

Mitsubishi Motors President Rolf Eckrodt said the auto maker is targeting annual sales of 600,000 cars in NAFTA countries in 2007.

Mitsubishi's sales in Europe will likely remain stagnant in 2003, he added. The auto maker sold 200,000 units in Europe in 2002. He added that European sales will likely start to expand from 2004.

The company also expects to sell at least 100,000 cars in China in 2003, up from 70,000 units in 2002, Mr. Eckrodt said.

In addition to building a new plant, Mitsubishi Motors is examining two other options to add capacity to its North American production and accelerate its ongoing sales expansion in the region, Mr. Eckrodt said.

He cited the possibility of using Chrysler plants, as well as adding capacity to Mitsubishi Motors' existing assembly plant in Illinois.

The auto maker, which spun off its commercial vehicle operation earlier this month and is now fully focused on passenger cars, aims to sell about 400,000 cars in North America, including 365,000 units in the U.S., in 2003.

The car maker continues to struggle in Japan following a scandal involving a coverup of product defects in 2000. However, Mitsubishi expects a sales increase in 2003, focusing on the "Colt" compact launched in November and the "Grandis" minivan scheduled for launch in May.

The auto maker targets domestic sales for the year of 400,000 units, Mitsubishi Senior Vice President Eiji Iwakuni said. The company will release official 2002 sales data next week, but a spokesman said last year's domestic sales likely reached 370,000 units.

Mr. Eckrodt said the Grandis, which Mitsubishi Motors plans to launch in Europe in 2004, should help the company achieve sales expansion there.

He also said that the Chrysler division of DaimlerChrysler is likely to choose the North American production site for engines to be developed jointly by DaimlerChrysler, Mitsubishi Motors and Hyundai Motor Co., by the end of March.