TOKYO (AFX) - Mitsubishi Motors Corp is to start production of a new sports utility vehicle (SUV) at a factory in Aichi Prefecture that it had once planned to close, in a bid to overhaul its production facilities at home and abroad, The Nihon Keizai Shimbun reported.
The company will also downsize a factory in the Netherlands through payroll cuts and other means, while manufacturing plants in North America and Australia are expected to remain intact, the report said.
The automaker will start assembling the Outlander SUV at the Okazaki plant within this year for export to North America. Mitsubishi Motors had decided in 2004 to shut down the factory because its capacity utilization rate remained low due to sluggish sales of the Colt compact and other models produced there, but postponed the planned closure last year.
Even so, the company is not sure whether to maintain the factory because of uncertainty about future demand for its automobiles, the report added.
It has opted to delay a final decision on the plant's closure for two to three years until it can confirm demand trends.
The carmaker will limit capital investment in the facility to prepare for producing the new vehicle to the minimum level possible, about several bln yen, including the cost of upgrading welding equipment.
Meanwhile, the firm is considering cutting the work force at its Netherlands subsidiary, NedCar, by 30 pct, or about 1,000 people, and reducing its output by one-third. The move comes after German automaker DaimlerChrysler AG decided to stop production of its Smart compact cars, some of which was outsourced to NedCar.
/swp