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DaimlerChrysler Secures Joint Project Deal with Mitsubishi

Renewed Agreement Calms Waters Between Two Automakers Still Reeling from Soured Bailout Deal

Doubtfully there are two automakers that need each others help more than Chrysler Group and Mitsubishi Motors, especially in developing North American targeted vehicles. Chrysler needs the Japanese automakers small and medium-car platforms for its upcoming Neon and Sebring replacements, and Mitsubishi wants to take advantage of Dodges Dakota for its stylish sport truck that appeared in concept form earlier this year.

Other potential cooperative projects that have been bantered about the rumor mill include a Mitsubishi version of Chryslers famous minivan, which might be a long shot being that the domestic automaker guards the mid-van segment as sacred territory.

Recent comments

Chrysler Group and Mitsubishi Motors need each others help, especially in developing North American targeted vehicles. (Photo: Mitsubishi Motors North America)

supposedly made by executives in both camps have given cause for concern, however, raising questions as to whether the two automakers would be able to continue to work together in the aftermath of DaimlerChrysler pulling out of a proposed bailout that was due to take place earlier this year. Mitsubishi found financial aid elsewhere, and is now in the process of restructuring its business from the ground up. Part of this restructuring includes new products, something that if done correctly can completely turn an automaker around

Part of Mitsubishis restructuring includes stylish new products like the Dodge Dakota-based sport truck. (Photo: Mitsubishi Motors North America)

- look at Chrysler Group with its new 300 sedan and Dodge Magnum sport wagon, not to mention the popular new Durango, Dakota and Ram.

Working together on joint venture projects not only gives both companies new more competitive products, but it also allows for greater economies of scale. Chrysler, for instance, will theoretically reduce its cost of producing Dakota components if it makes more parts for Mitsubishis sport truck. If the Mitsu truck were to be built in the Dakota plant, even greater savings are possible depending on the deal that is struck. Mitsubishi has the most to gain, as Chrysler will no doubt sell more compact

Chrysler can reduce its cost of producing Dakota components if it makes more parts for Mitsubishis sport truck. (Photo: Mitsubishi Motors North America)

and midsize cars than Mitsubishi will ever sell pickup trucks, or for that matter minivans if the domestic automaker were to loosen its grip on the Caravan and let Mitsubishi build a version of it under the tri-diamond nameplate.

In an Associated Press story that surfaced out of Hanover, Germany on Wednesday, DaimlerChrysler AG was quoted as saying it has signed a contract with Mitsubishi Motors Corp. to renew each automakers commitment to joint production and development projects. Most likely this renewed contract was only necessary to quell concerned market analysts, but whether all for show or in effect increasing the strength of the previous agreement the announcement should bring a sigh of relief to those affected if the strategic alliance were to be dissolved.

The "world engine" is shared between the European-spec Mitsubishi Colt and DaimlerChryslers North American-bound smart forfour. (Photo: DaimlerChrysler)

On the subject, spokesman Toni Melfi commented to an Associated Press reporter by telephone from a conference in Paris, "Its a new contract, (but) we have only confirmed all the ongoing projects." The report stated that Melfi wouldnt elaborate on any contract details.

Melfi did confirm, however, that the current joint projects include construction of the "world engine", which is shared between the European-spec Mitsubishi Colt and DaimlerChryslers North American-bound smart forfour, and development of a mid-class car platform to replace the current Sebring. The report made no mention of additional projects, such as a joint small car platform, the Mitsubishi sport truck or any interest in sharing Chryslers minivan components.

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