FRANKFURT -- DaimlerChrysler AG insisted Thursday that joint development projects with Mitsubishi Motors Corp. would continue despite its refusal this year to help bail out its Japanese partner.
A spokesman for DaimlerChrysler dismissed as "wrong" a Japanese newspaper report that Mitsubishi was loosening its business alliance with DaimlerChrysler in a move that would deepen the rift between the allies.
"Mitsubishi remains one of our strategic partners in Asia, and all alliance projects that make economic sense for both partners will continue," he said, reiterating the company's stance. "They are also secured through long-term contracts."
In Tokyo, Japan's only unprofitable carmaker said it would sever those ties with Daimler that did not have merits for both companies.
DaimlerChrysler, the world's fifth-largest automaker, cut financial support for the ailing Mitsubishi this year.
"We will keep the ties with DaimlerChrysler in which we can both be in a win-win situation," said a spokesman at Japan's fourth-largest carmaker. But he declined to elaborate further on the two companies' future alliance plans.
Business daily Nihon Keizai said Mitsubishi would cancel a plan to use common platforms for the two companies' medium-sized sedans and instead would use its own existing platform to fully realize its r&d investment.
But the DaimlerChrysler spokesman said this was untrue.
"The alliance projects generate substantial synergies for all partners, so it would not make sense that one of the partners stop the projects now," he said, noting the first cars with common platforms were set to roll out in 2005 and 2006.
These include the redesigned Dodge Neon, Chrysler Sebring, Dodge Stratus and a successor to the Mitsubishi Galant.
MORE THAN 50-50?
In May, Mitsubishi said it would continue developing and producing mid-sized engines and would maintain an original equipment manufacturer agreement to buy pickups from the Chrysler group in North America.
Mitsubishi said discussions are taking place on the future of NedCar production in the Netherlands, which the two companies had planned to make a 50-50 joint venture.
The Nihon Keizai said DaimlerChrysler was to raise its investment in the venture to more than half, but the DaimlerChrysler spokesman said no such thing had been decided.
DaimlerChrysler has said it will keep a stake in Mitsubishi for the time being. It bought a stake in Mitsubishi in 2000 with a view to expanding in Asia, but its original 37 percent has fallen to just over 20 percent after Mitsubishi's recent share issuance.
The debt-ridden Mitsubishi received a $4.5 billion rescue package from the Mitsubishi group and investment funds this year as it struggles to recover from a scandal that has damaged its brand and battered sales.
In 2000, Mitsubishi suffered the biggest scandal in its history when its decades-old practice of hiding customer complaints came to light, but it was hit again this year by news that the coverups had continued, prompting customers to flee its brand.
Mitsubishi said Thursday that domestic sales plunged 52.2 percent in July year-on-year, while its July output in Japan slumped 17.7 percent from a year earlier to 53,307 units.
The company also unveiled the results of its latest investigation into its past recall problems Thursday, announcing that it found 224 instances in which it had secretly repaired defects without issuing a formal recall.
Of those 224, measures have already been taken on 31.
Mitsubishi said its analysis showed that a recall was only necessary in one of the remaining 193 cases but said it would consult with Japan's Ministry of Land, Infrastructure and Transport on its findings.
"We looked at all the documents we possibly could," said Mitsubishi Vice Chairman and Chief Business Ethics Officer Koji Furukawa, while refraining from giving Mitsubishi a clean bill of health. "But it is difficult to make a declaration of total safety."