Search for synergies delays Mitsubishi products

TOKYO -- Mitsubishi has delayed the long-awaited next-generation redesigns of its Outlander crossover and Outlander Sport compact crossover, key pillars of its U.S. lineup, as engineers seek ways to share components with Nissan vehicles, supplier sources say.

The delay marks one of the first impacts the new Nissan-Mitsubishi alliance could have on the U.S. market and is a blow to U.S. Mitsubishi dealers clamoring for new product.

The next-generation Outlander had been scheduled for launch in the fiscal year ending March 31, 2019, while the redesigned Outlander Sport was due the following year.

Now, the Outlander is expected in late 2019 or early 2020, while the Outlander Sport has been pushed back until after 2020, one supplier executive involved with the programs said.

Both vehicles are under review as Mitsubishi and Nissan search for ways to share parts and architecture with the Nissan Rogue and Rogue Sport crossovers, another supplier executive said.

The goal is to commonize underpinnings and components not visible to the consumer so the vehicles can save money while maintaining an outer identity distinct to each brand, the supplier executives said.

The holdup underscores the urgency with which Carlos Ghosn, chairman of both Nissan Motor Co. and Mitsubishi Motors Corp., is trying to deliver shared savings between the companies. As head of the Renault-Nissan Alliance, he engineered Nissan's purchase of a controlling stake in Mitsubishi last year, building a global auto empire with sales approaching 10 million units.

Thanks to the addition of Mitsubishi's 2016 global sales of 934,013 vehicles, the alliance's global volume surged to 9.96 million vehicles in 2016, falling just a hair short of third-place GM.

Now the focus turns to combining programs, slashing costs and promoting efficiencies.

In announcing Nissan's takeover of Mitsubishi, Ghosn outlined plans to reap savings of 49 billion yen ($427.1 million) in the next fiscal year through joint manufacturing, product sharing, combined purchasing and other combined operations that spread costs over higher volumes.

At the time, little was said about ways the partnership could impact North America.

Mitsubishi confirmed product plans are under review but declined to comment on any delays.

"Now we are reviewing our future product lineup in order to maximize the alliance synergy effect," spokesman Tetsuji Inoue said. "We will announce this matter at an appropriate time."

At this month's Geneva auto show, Mitsubishi COO Trevor Mann told Reuters that Mitsubishi and Nissan may also pool components and manufacturing of the next-generation Nissan Navara and Mitsubishi Triton pickups, both geared toward emerging markets.

Mitsubishi's U.S. dealers have yet to be told of any delays related to the next-generation Outlander or Outlander Sport. Mann visited California earlier this year to meet with dealers and no such delay was discussed, Joe Bizzarro, chairman of Mitsubishi's national dealer advisory board, told Automotive News.

A longer wait for the redesigned Outlander duo could eat into Mitsubishi sales at a time when demand for crossovers is soaring. The Outlander -- Mitsubishi's No. 2 seller in the U.S. in 2016 -- was last redesigned in 2012 and freshened for 2016. The Outlander Sport -- Mitsubishi's best-selling model in the U.S. -- hasn't had a full model change since its 2010 introduction. It received a light update for 2016.

Though dealers may have to wait longer for the full-model changes, revamps that draw from the best of the Mitsubishi and Nissan toolboxes could deliver better performance and lower costs. Dealers can also take solace in the fact that other fresh product is on the way.

The new Eclipse Cross, a coupe-styled crossover that will slot between the Outlander and Outlander Sport, debuted at the Geneva show and is due in the U.S. in early 2018.

Dealers can also find relief in Mitsubishi serving as one of the few value-oriented brands in the U.S. market -- Scion has been folded into Toyota, Suzuki pulled out of the market and Hyundai and Kia have cast their eye upmarket.

David Undercoffler contributed to this report.