TOKYO -- After dumping Renault as a possible partner for small- and midsize sedans, Mitsubishi has entered talks with Nissan as an alternative source for the badly needed midsize vehicle.
Nissan Motor Corp. began discussions with Mitsubishi Motor Corp. after talks with Nissan’s alliance partner Renault broke down, according to a Nissan source familiar with the situation.
An agreement would help beleaguered Mitsubishi plug a hole in a sparse U.S. lineup that is hurt by an aging compact Lancer sedan and the discontinuation of the larger midsize Galant.
A Mitsubishi spokesman said plans to replace the Galant are on indefinite hold but that efforts are still underway to salvage a small-sized successor to the Lancer. Mitsubishi may end up developing the car itself. But it is also looking for partners to help it shoulder steep r&d and production costs, he said.
While he declined to confirm whether talks with Nissan have begun, he said working with the Japanese rival is “one option.”
Mitsubishi is prioritizing a Lancer replacement because it is a global car with demand in multiple markets, including the U.S. The large-size sedan it had been considering with Renault SA was seen mainly as an America-only offering.
The Nissan source said a small-sedan may be built in either North America or Japan, though he said nothing has been decided.
Talks with Renault had focused on getting sedans from the French company’s assembly plant in Busan, South Korea. A Mitsubishi source said the company pulled the plug partly because the sudden appreciation of the Korean won against the dollar and Japanese yen undercut the plan’s profitability.
Mitsubishi’s U.S. sales rose 25 percent in 2014 to 77,643 cars and trucks, largely on demand for that Outlander Sport compact crossover and Mirage compact hatchback.
Lancer sales fell 15 percent to 16,495 vehicles in 2014, though they surged 68 percent to 1,515 units in January.
Mitsubishi, which is positioning SUVs and crossovers at the center of its revival, has been absent from the midsize sedan segment, one of the industry's largest, since dropping the Galant in 2012.