TOKYO - Mitsubishi Motors Corp. may get some outside help to ease what President Katsuhiko Kawasoe calls 'the big headache' in his company's restructuring plans - its European and Australian operations.
Kawasoe told reporters at the end of May that Korea's Hyundai Motor Co. eventually might be invited to join Mitsubishi and DaimlerChrysler's development of a new small car code named Z.
'However, we have not had a forum where DaimlerChrysler, Mitsubishi and Hyundai all sat down together on this issue,' he said.
DaimlerChrysler owns a 34 percent stake in Mitsubishi.
Kawasoe said he is confident the European and Australian operations can return to profit.
Developing the world car should address Mitsubishi's woes in Europe, 'but it takes a while to reach that second stage,' he said.
'We must make further efforts to increase unit sales, even though the business viability is not positive,' Kawasoe said.
Mitsubishi has struggled to grow its European operations profitably since it started making cars at NedCar in Holland with Volvo in the early 1990s. It makes the Carisma and Space Star minivan there.
Kawasoe is optimistic about the Australian market. Australian vehicle sales are around a record 700,000 to 800,000 a year. 'I'm hopeful this could reach 1 million,' he said.
But Kawasoe raised questions about Mitsubishi's money-losing business there.
'Is our production capacity really in line with the size of the market? Perhaps the business plan overestimates the size of the market ... and makes it more difficult to reach break-even,' he said.
Mitsubishi Motors Australia Ltd. recently hired Tom Phillips to head its turnaround, effective June 23. He was Toyota Motor Corp. Australia Ltd.'s sales and marketing director.
'Under the new management, we're confident that the rebuilding of this operation would be possible,' Kawasoe said.
Kawasoe also confirmed his previously stated position that Mitsubishi's plant in Adelaide, Australia, will get the go-ahead to build a replacement for the current Magna sedan only 'after we've affirmed the continuation of the business's viability.'
Mitsubishi recently began shifting its focus from cutbacks and cost cutting to growth. In addition to launching a new small car in Europe and Japan, Kawasoe's new midterm strategy, called Heart-Beat 21, aims to push US sales up more than 50 percent.