Mitsubishi to Add Compact Sport-Utility

Mitsubishi Motors Corp., Japan’s fourth-largest auto maker, said it will add a compact sport-utility vehicle to its U.S. lineup as it tries to boost its sales by more than half to 300,000 units by 2004.

The maker of the Galant mid-size sedan and Eclipse coupe said it will begin selling a compact, Japan-built sport-utility in the U.S. by late 2001. Mitsubishi, the eighth-largest auto maker in the U.S., now sells only one sport-utility in the U.S., the Montero.

Mitsubishi, whose U.S. operations are based in Cypress, plans to redesign its Montero as a large, luxury-segment sport utility next year. The Montero is now considered a mid-size sport utility.

The auto maker needs the new compact “to help secure the future growth of Mitsubishi Motors in the U.S.,” President Katsuhiko Kawasoe said at an analysts conference in Las Vegas.

The new SUV should arrive in showrooms in two years as a 2002 model. It will compete with the successful Toyota RAV4 and Honda CR-V and will be preceded by new models from Ford Motor Co., Mazda Motor Corp. and Hyundai Motor Co.

Small SUVs priced in the low $20,000 range lack the big profits of mid-size and full-size SUVs. But auto makers see them as an effective way to lure young buyers who will tend to stay with the brand when they trade up, said analyst Jim Hall of AutoPacific Inc.

Mitsubishi’s U.S. sales, spurred by demand for the redesigned Gallant, rose 14% to 110,109 in the first half of the year, twice the industry rate. The auto maker is recovering after seeing its sales slide since peaking at 230,279 units in 1994.