Struggling car maker Mitsubishi Motors Corp is considering scrapping its plans to shut down its factory in Aichi prefecture, central Japan, in view of its ongoing negotiations with Nissan Motor Co on the possibility of supplying more minicars, the Nihon Keizai Shimbun reported over the weekend, citing unnamed company sources familiar with the matter, according to AFX News.

Under plans devised in May, Mitsubishi Motors is scheduled to close the plant in Okazaki, Aichi prefecture, at the end of 2005 and shift production of compact cars and minivans assembled there to a facility in Okayama prefecture in western Japan and a subsidiary in Gifu prefecture, the newspaper reported.

The Okayama site has been supplying 20,000 commercial mini-vehicles annually to Nissan since 2003, and its output capacity will need to be lifted by more than 100,000 units a year if Mitsubishi Motors wins a deal to provide minicars to Nissan, the report quoted the sources as saying.

The small cars will be sold under the Nissan brand, the report said.

More than 500 Mitsubishi Motors workers have already left the Okazaki plant under an early retirement programme, or have moved to Toyota Motor Corp and its group companies, and scrapping the initial plan could result in additional costs for Mitsubishi Motors, the Japanese business daily said, according to AFX News.

Auto market intelligence
from just-auto

• Auto component fitment forecasts
• OEM & tier 1 profiles & factory finder
• Analysis of 30+ auto technologies & more