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Last Updated: Tuesday, 11 January, 2005, 08:35 GMT
Mitsubishi in Peugeot link talks
Mitsubishi car sales fell more than 40% during 2004
Trouble-hit Mitsubishi Motors is in talks with French carmaker PSA Peugeot Citroen about a possible alliance.

On Tuesday Mitsubishi, the only major Japanese car firm in the red, confirmed earlier reports of negotiations.

But a spokesman refused to comment on speculation that Mitsubishi could end up building cars for PSA and perhaps its Japanese rival Nissan.

Mitsubishi has been hit by a recall scandal and the withdrawal of support from shareholder DaimlerChrysler.

The US-German firm, once a majority shareholder, decided last April to stop providing financial backing.

Mitsubishi's sales have slid 41% in the past year, catalysed by the revelation that the company had systematically been hiding records of faults and then secretly repairing vehicles.

Mitsubishi is due to unveil a recovery plan later in January.

Analysts said that alliances with other carmakers would be a necessary part of whatever it came up with, not least because its own slow sales have left its manufacturing capacity under-used.

Nissan eyes troubled Mitsubishi
06 Dec 04 |  Business
Mitsubishi gets pledge of support
03 Dec 04 |  Business
Mitsubishi crashes into the red
08 Nov 04 |  Business
Mitsubishi unveils heavy losses
04 Aug 04 |  Business

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