VIENNA – MMC Rus, the Russian Mitsubishi distributor, is forecasting a significant increase in sales this year, despite a potential decline for the market overall.

Mitsubishi sold 74.294 vehicles in Russia last year, and plans for about 85,000 units in 2013.

The distributor delivered 37,575 vehicles through June, up 16.6% from like-2012, while the Russian market was down 5.8% overall.

The Mitsubishi ASX, known as the Outlander Sport in the U.S., was the brand’s best-selling model with 11,754 units, followed by the Outlander, at 11,214. Mitsubishi occupies 13th place in Russia’s light-vehicle market and is 11th among foreign marques.

“(The) Russian market plays a very important role in Mitsubishi Motors’ global sales,” MMC Rus CEO Andrey Pankov tells WardsAuto.

In fiscal 2012, Russia was Mitsubishi’s fourth-largest market behind Thailand, Japan and Indonesia.

“If we exclude the so-called K-cars (with 0.66L engines) from the total statistics, Russia is ahead of Japan,” Pankov notes. “Therefore the Russian market is strategically important for Mitsubishi Motors.”

For example, Russia accounts for 20% of the Pajero’s global sales.

MMC Rus is owned 49% by Mitsubishi, 42% by the Russian Rolf Group and 9% by Mitsubishi Motors.

Last year, the auto maker experienced serious supply problems in Russia, partly due to the switch in local assembly from the old to the new Outlander. It also suffered from a shortage of Pajero Sport and L200 models supplied from Thailand.

“Almost 20% of vehicles we are selling are imported from Thailand,” Pankov says. “After the country recovered from the floods, which happened in 2011, we were able to recover supply of Thailand-produced vehicles to Russia in the fourth quarter of last year.

“But now we are in a much better shape, because the factory in Thailand has recovered, the Russian factory has started producing the new Outlander and all other supply issues have been resolved,” Pankov says.

The Outlander is assembled at PCMA Rus in Kaluga, a plant owned 70% by PSA Peugeot Citroen and 30% by Mitsubishi.

While the old model was assembled from semi-knocked-down kits, the new-generation Outlander, which began volume assembly in November 2012, is produced from complete-knocked-down kits.

Despite the local assembly, the company is continuing to import the Outlander from Japan.

“One of the reasons for this is that because of a very successful launch demand exceeds manufacturing capacity in Kaluga,” Pankov says.

“We plan to continue to supply several versions of the 2L Outlander from Japan for quite a long period of time, at least until Mitsubishi will be able to expand capacity in Russia,” he says.

Some 15%-20% of Outlanders sold in Russia will come from Japan this year, Pankov says.

In addition to the Outlander, PCMA launched volume assembly of the Mitsubishi Pajero Sport in July.

“We expect that, ideally, some 40,000 vehicles, including 30,000 Outlanders and 10,000 units of the Pajero Sport, will be manufactured in Kaluga (this year), but so far it is just a rough estimate,” Pankov says.

Recently, the Russian importer started to source the Mitsubishi ASX from the U.S. instead of Japan.

“The first vessel arrived in December and we launched that car as a facelifted version of the ASX in February,” Pankov says. “The launch of the American-built ASX was quite successful, because we were able to prove that even though the factory is in the U.S. and not Japan build quality and reliability remain the same.”

At the Moscow auto show last August, Mitsubishi’s President Osamu Masuko announced a plan called “Project 15” targeting sales in Russia of 150,000 units a year by 2015 through 150 dealers.

“Of course, the jump from the current 85,000 units, which we are targeting for this year, to 150,000 is absolutely impossible without launching a new model,” Pankov says. “Currently, 85% of our sales, or sometimes even 90%, are generated by SUVs.”

To achieve the goal, Mitsubishi needs new mainstream cars for the Russian market.

“Unfortunately, in terms of passenger cars we sell only the Lancer, which is probably the oldest car in the C-segment,” Pankov points out. “Some competitors have even gone through two generations since the Lancer was launched.

“We need to have a B- or C-segment car launched (in) the Russian market, hopefully with local production, because thanks to quite high custom duties and car-scrappage fees, local production is key for success in the B- and C-segments,” he adds. “Local production is needed just to be on parity with competitors, because up to 90% of cars in the B-segment sold in Russia are produced in Russia.”

However, if additional models are to be built in Russia, Mitsubishi will have to increase local assembly capacity. That could mean an expansion of the PCMA JV plant or even the construction of a new facility.