Mitsubishi Motors Australia boss Tom Phillips is at odds with his Japanese superiors following a new threat to close the car giant's two Adelaide factories, writes Mike Duffy.

Mitsubishi Motors Corporation president Takashi Sonobe told a press conference in Tokyo on Wednesday that the performance of its Australian subsidiary in the January-March quarter "has not been promising''.

But Mr Phillips insisted the Adelaide-based subsidiary was $3 million ahead of the 2001 budget during the three months.

An angry Mr Phillips today sent an eight-page fax to MMC in Japan - but refused to reveal what he had said.

Mitsubishi Australia later released a statement in which Mr Phillips said: "There seems to be an incorrect impression that Australia has fallen behind its plan in the first quarter.

"We will be on target at the end of the first quarter.

"I would like to think we can be allowed to get on with our business without any further unproductive, negative speculation,'' Mr Phillips said. MMC has released several statements over the past 18 months which have fuelled speculation the Australian plants were battling to remain open as an assembly operation.

MMC's chief operating officer Rolf Eckrodt, installed by DaimlerChrysler, which now controls the Japanese car maker, said a decision would be made soon on Adelaide's future. He said the decision would be made in May or June.

"The Australian market is very important,'' he said. "It is close to Japan, and it is an interesting, growing market,''

But he cautioned MMC would assess its Australian affiliate "as a business.''

The latest suggestion Mitsubishi could close its assembly operations came only hours after Mr Phillips revealed news of $100 million investment to develop an updated Magna/Verada range for release in 2003.

The rakishly-styled sports sedan will be powered by a new 3.8 litre V6 and is designed to challenge Commodore and Falcon in the large car segment. Mitsubishi plans to re-introduce a four cylinder engine option to boost Magna sales by 20,000 units a year in Australia and overseas.

And to maximise sales of the new car, Mitsubishi will offer a range-topping four wheel drive version.

* Author Mike Duffy is Motoring Editor of The Advertiser and the Sunday Mail, Adelaide, South Australia.

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