Mitsubishi passenger cars in limbo

It's no secret that Mitsubishi's focus over the last five years has centred on SUVs, as the company seeks to capitalise on ever-increasing global demand.

But the Japanese car-maker's emphasis on SUVs has come at a cost, with Mitsubishi's small (C-segment) and large (D-segments) passenger cars now lagging a full generation behind the competition in terms of technology, efficiency, safety and design.

While Mitsubishi no longer sells mid-size or large cars in Australia, where the homegrown 380 sedan was killed off in July 2007, its aged Lancer small-car range was released a few months later and now dates back almost eight years.

That situation appears unlikely to change in the mid-term, when Mitsubishi will be forced to soldier on with dated products both in Australia, where small cars comprise the biggest sales segment, and North America, where medium cars still dominate overall sales.

Don Swearingen, Mitsubishi Motors North American executive vice-president, confirmed to motoring.com.au at the New York motor show that the car-maker's partnership to develop new sedans with Renault-Nissan has gone sour and the company is now actively looking for a new partner to shoulder the costs of developing new sedans.

It's not clear why the Mitsubishi-Renault platform-sharing deal faltered after the deal was brokered in late 2013 at the Tokyo motor show, but Swearingen hinted that the arrangement would not have been profitable.

"We're a smaller company and we have to make sure every car we launch is going to be successful. It has to be successful for us, our dealers and consumers," he said.

The setback puts Mitsubishi in an unenviable position. Even once a new deal is done with another partner — a situation Swearingen said was the preferred strategy rather than going it alone — it will take years before the Lancer and North America's even older Galant are replaced.

Nevertheless, the Mitsubishi executive said the company was now "working to fill the gap... talking to different strategic partners."

He wouldn't say which car-makers were on its short-list to form an alliance to develop its next-generation passenger cars, but admitted something had to be done.

"We are not ready to make any further comment yet but we do understand the importance of the segments," he said.

"All options are on the table but clearly with a partner we can get not only the volume for us but also the partner.

"It makes the business case easier to push through. We want to make sure there's profit for everybody. It doesn’t make sense to bring a car out and lose money on."

There is a silver lining for Mitsubishi though. The company has seen huge growth in the US in recent years, recording double-digit percentage growth for the past few years, and Swearingen says that a friend in high places is helping the company's US arm fast-track decisions.

"As you gain more sales volume clearly they [head office] want to know how we can sell more cars. One of the things that has helped us here in North America is that we've got a chairman from Japan to work here – he also holds a board seat in Japan.

"We have assembly and engineering here, so when we do have a concern or an issue we can bring all the necessary people together to find solutions."