Mitsubishi Outlander to Get Diesel; Auto Maker Expects FY Profit

DETROIT – Mitsubishi Motors North America says its Outlander compact cross/utility vehicle soon will offer a diesel engine option for the U.S. market.

The Japanese auto maker already has said its Lancer compact car will offer a diesel mill in 2010, and now adds the Outlander, to follow soon after, a spokesman tells journalists at the 2007 North American International Auto Show here.

The new Lancer, which soon will be sold in Europe with a sourced diesel from Volkswagen AG, will get the new Mitsubishi-developed engine as well later in its lifecycle, the spokesman says, adding Europe may get the new diesel before other parts of the world.

In an interview here, MMC Chairman Takashi Nishioka says the auto maker expects to turn a profit in North America for the first time in four years, when its current fiscal year ends March 31.

Worldwide, Mitsubishi forecasts an operating profit of ¥40 billion (roughly $400 million) for its fiscal 2007, Nishioka says through a translator, crediting improved sales and cost reductions for the uptick.

Nishioka and MMNA CEO Hiroshi Harunari both say Mitsubishi still must tread carefully, and the anticipated operating profit does not mean the auto maker’s sole North American manufacturing plant in Normal, IL, will see its second shift return. The shift was eliminated in fall 2004.

Harunari looks for U.S. sales in the 140,000-150,000-unit range in 2007. Mitsubishi’s 2006 U.S. sales fell 4.4% to 118,558 units. Lancer sales slid 16.8% to 23,167 units, and Outlander deliveries dipped 3% to 11,493.

Mitsubishi targeting eventual U.S. sales of 50,000-60,000 units for Outlander.

The Eclipse sports car was the auto maker’s best-selling model last year but still fell short of its goal, with sales of 33,003 units, albeit a respectable increase of 34.8% over 2005.

Harunari says Mitsubishi considers the C-segment Lancer and Outlander its core models and eventually plans to target annual U.S. sales for each car of 50,000-60,000 units.

“Normally, we are told a 50,000- to- 60,000-unit model is required for us to be successful (in the U.S.),” Harunari says.

Mitsubishi’s 2006 lineup consisted of eight models, and the brand sold just under 120,000 units, he says, noting work still must be done to get the auto maker stabilized in the U.S. market.

Harunari says Mitsubishi cannot consider entering new segments in the U.S. until it completes the goals outlined in its 3-year business plan, which ends March 31, 2008.

Meanwhile, Harunari says Mitsubishi still intends to use 4-cyl. engines from the Global Engine Mfg. Alliance plant in Dundee, MI – in which it shares a partnership with Chrysler Group and Hyundai Motor Co. Ltd. – although he does not provide a timeframe.

An MMC executive told Ward's in 2005 the Japanese auto maker would begin taking engines from Dundee in 2008 for ’09 models.

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