TOKYO -- Mitsubishi Motors Corp.'s North American turnaround is proving tougher than the company had hoped, and several key issues remain unresolved.
When Mitsubishi laid out its revitalization plan in May, it expressed the hope that U.S. sales would bottom out this year.
"But frankly, I think it will take until 2005" before sales hit bottom and the turnaround begins, says Mitsubishi CEO Yoichiro Okazaki. Mitsubishi's sales fell 35.8 percent through October this year compared with the same period last year.
The plan was for North America to return to the black in 2006, but the automaker is backing off. "We don't intend to give up on that target of course, but there's a possibility that it may be delayed until 2007," Okazaki says.
Meanwhile, he denies Japanese media reports that he has met with Jean-Martin Folz, chairman of PSA-Peugeot/Citroen SA. The media have suggested that the companies may form a strategic partnership.
But he says the two companies have discussed joint projects. He offered no details.
Mitsubishi has not reached a decision on a sedan larger than the Galant to replace the Diamante in the United States. He said the company first must decide whether to develop the next-generation Galant jointly with the Chrysler group or by itself. He offered no further explanation.
Theoretically, the next-generation Galant could be assembled in a Chrysler group factory if it were jointly developed by Chrysler and Mitsubishi.
The Galant question needs to be resolved by year end or "by the latest, early next year," Okazaki says.
Okazaki repeatedly has described Mitsubishi as "oversized." In the United States, "We've set some very high sales volume targets in the past," he says. Now he says, "it will take some time" to restore trust between the manufacturer and dealerships.