TOKYO -- Mitsubishi Motors Corp. will begin using German-made engines for its Colt subcompact sold in Japan starting around 2005, the Nihon Keizai Shimbun newspaper reported Wednesday.
The engines will be produced at a factory being built jointly by Mitsubishi Motors and German partner DaimlerChrysler AG, it said.
A Mitsubishi spokesman said the automaker was studying the possibility of using engines made at the German plant in cars other than a new compact car to be introduced in Europe in 2004, but that nothing had been decided.
The engine plant, in Koelleda in central Germany, will be completed by December.
Using German-made engines for cars sold in Japan would be a first for Mitsubishi, and would reflect a further deepening of ties between the two partners. DaimlerChrysler owns a controlling 37 percent stake in the Japanese carmaker.
The plan also would help the automakers save money by boosting capacity utilization at the plant.
Lost production at Mitsubishi's engine plant in Japan that builds engines for the Colt would be replaced by a model to be launched later, the business daily said.
Other Japanese automakers such as Mazda Motor Corp. and Nissan Motor Co., which have capital alliances with Ford Motor Co. and Renault SA, respectively, also have agreements with their partners to supply and develop engines.
Mitsubishi and DaimlerChrysler also recently set up a joint venture with South Korea's Hyundai Motor Co. Ltd. to operate a new engine plant in the United States.
The German automaker owns 10 percent of Hyundai.