Mitsubishi and DaimlerChrysler are discussing the possibility of DC dumping its ageing Vario small truck line and replacing it with Mitsubishi's redesigned Canter launched this week in Japan.

Mitsubishi would also take key responsibility for small truck development, reports from Japan said.

"Talks are moving in that direction," Mitsubishi truck division chief operating officer Takashi Usami told reporters at the Canter launch, according to Reuters.

Reuters said that DaimlerChrysler started selling Mitsubishi's small trucks in Europe last year and in South Africa from March and added that Mitsubishi is also considering selling the trucks in the United States using DaimlerChrysler's Freightliner channel.

Usami reportedly said that annual Vario production was very small and that DC long-term plans did not include a next-generation replacement.

Reuters said that DC, which owns 37.3% of Mitsubishi and has the option to increase its stake next year, last year extended its alliance with the Japanese vehicle maker to cover trucks as well as cars after the Volvo truck making option withdrew from an earlier agreement with Mitsubishi.

"We are under no time pressure to decide how our co-operation with Mitsubishi in trucks will be structured - we are considering various options," a DaimlerChrysler spokesman told Reuters.

The news organisation said that the two vehicle makers are considering moving the Mitsubishi truck division into a new joint venture, a move similar that proposed under Mitsubishi's now-defunct deal with Volvo.

Reuters reported Mitsubishi's president Takashi Sonobe saying that the two companies hoped to reach a decision by the end of the year while Usami was cited as saying that making the division into a separate company was still the best option from cost and administrative standpoints.

Mitsubishi planned to sell 3,700 remodelled Canter and Canter Guts trucks in Japan each month with exports begin next year, Reuters said.

About 80,000 Canters were sold worldwide in Mitsubishi's last business year ended March 31 with roughly half exported, Reuters added.

Usami told Reuters it would take up to 10 years before the two automakers could develop a joint platform because truck model cycles were very long and added that they were looking at sharing parts.