TURIN -- Mitsubishi Motors Corp. must pay contract manufacturer Pininfarina S.p.A. about 19 million euros (about $25 million) as a result of a dispute between the two companies over production of the Japanese automaker's Colt CZC.
Mitsubishi awarded Pininfarina a contract to build the subcompact convertible but the car did not meet sales expectations and the Italian coachbuilder produced 16,695 units between 2006 and 2008 -- less than a third of the planned 60,000-unit volume.
Mitsubishi's European subsidiary sought 43.4 million euros in damages from Pininfarina to compensate for a delayed production start of the car and because of alleged quality issues.
In a counter claim, Pininfarina alleged Mitsubishi had overestimated the market for the CZC and demanded 100 million euros in compensation from the automaker as damages and to recoup its investments for the units not built.
The International Chamber of Commerce's arbitration court in Paris last month settled the two-year dispute by awarding Pininfarina 37.9 million euros plus interest to repay the company's investment to produce the Colt CZC. The court dismissed the company's request for damages.
The arbitrators also awarded Mitsubishi 20.5 million euros plus interest for a six-month delay in the car's production start, but dismissed the automaker's complaints about quality issues.
As a result, the court ordered Mitsubishi to pay Pininfarina the net amount of 19.2 million euros, which includes interest payments.
A Pininfarina spokesman said that Mitsubishi's “inadequate marketing efforts and an overestimated market potential for the model” were the main reasons for disappointing sales of the Colt CZC.
Pininfarina also said the Colt CZC's quality should not have been an issue because the Colt hatchback, built by Mitsubishi at the NedCar factory in the Netherlands, sold about a third of initial expectations.
Mitsubishi declined to comment on the decision.
