Sonobe says sharing is alliance key

TOKYO - Mitsubishi Motors Corp. CEO Takashi Sonobe is upbeat about his company's alliance with DaimlerChrysler AG. In particular, he says, Mitsubishi's ties with the Chrysler group build on the companies' previous links, but are more balanced this time.

"I have great expectations for this alliance," Sonobe told Automotive News in an interview last week.

Chrysler and Mitsubishi were partners from 1970 to 1985, but the partnership was unbalanced, Sonobe said.

"Mitsubishi hadn't been in the American market yet" when the companies first tied up, he said. The relationship was therefore one-sided: "Chrysler helped us," he said.

"But now Chrysler is experiencing restructuring and Mitsubishi has gained a lot of experience in the American market. Both companies can take advantage of each other's strength to build a win-win situation," he said.

"So this is a new relationship, compared with the prior one. Mitsubishi has know-how to take advantage of this alliance with Chrysler."

DaimlerChrysler owns a controlling 37 percent stake in Mitsubishi, and Mitsubishi COO Rolf Eckrodt is a transferee from the German parent. The potential for savings from sharing development costs, platforms and components between Mitsubishi and Chrysler is a bright spot in what has been a troubled merger.

In looking for ways to make the alliance beneficial to Chrysler and Mitsubishi, Sonobe said, their history has been useful.

"The top management has changed drastically; however, the engineers and marketing people knew each other's products very well," he said.

No delays for redesigns

That is helping as the companies work out the details of sharing platforms and components, Sonobe said.

For example, the redesigns of the Mitsubishi Ga-lant in 2004 and Eclipse in 2005 will not be pushed back by efforts to develop their platforms jointly with the Chrys-ler arm of DaimlerChrysler, So-no-be said.

"There are no plans to delay those," he said.

Sonobe also confirmed that Mitsubishi and Chrysler are developing common platforms and shared components for a C-segment and D-segment car, but said there are no plans to build Mitsubishi-badged vehicles in Chrysler plants in North America in the next three or four years.

In other comments, Sonobe said Mitsubishi has not asked Chrysler for a U.S.-built pickup to be sold as a Mitsubishi.

Although DaimlerChrysler has raised the possibility of using Mercedes parts in Chrysler cars, there have been no discussions about using Mercedes parts in Mitsubishi cars, he said.

Sonobe said Mitsubishi sales in the United States next year should surpass this year's expected volume of 310,000, if there is "no major deterioration" in the U.S. economy.

Mitsubishi plans to trim "two or three" unprofitable models from its Japanese lineup but has no plans to cut any U.S.-market models, Sonobe said.

Larger sport-utility planned

A new, larger sport-utility to replace the Montero Sport is on schedule to be built at Mitsubishi's factory in Normal, Ill., starting the first quarter of 2003. First-year output is set to be 93,000, supporting United States sales of 80,000 to 90,000 a year thereafter.

Mitsubishi will import engines for the compact car it is jointly developing with DaimlerChrysler's smart unit from Europe from 2004. The

1.1-, 1.3-, and 1.5-liter DaimlerChrysler engines will be the first engines that Mitsubishi has imported and will be placed in cars sold in Japan.

The compact car will be launched in Japan in November 2002 bearing the Mitsubishi badge, using a Japan-built engine. It will be sold in Europe as a four-door smart.

Mitsubishi and DaimlerChrysler once referred to the compact car as the "Z" car, but have dropped that designation because of the confusion with the new Nissan 350Z.

The full Sonobe interview will appear Monday, Dec. 3, as a Talk from the Top.

You can reach James B. Treece at jtreece@crain.com

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