DaimlerChrysler Secures Joint Project Deal with Mitsubishi

Working together on joint venture projects not only gives both companies new more competitive products, but it also allows for

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

greater economies of scale. Chrysler, for instance, will theoretically reduce its cost of producing Dakota components if it makes more parts for Mitsubishi's 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 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 automaker's 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.

On the subject, spokesman Toni Melfi commented to an Associated Press reporter by telephone from a conference in Paris, "It's a new

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

contract, (but) we have only confirmed all the ongoing projects." The report stated that Melfi wouldn't 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 DaimlerChrysler's 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 Chrysler's minivan components.