Mitsubishi In Talks To Supply Small ICE Cars To Peugeot

The Nikkei reports that Mitsubishi Motors Corp. is in talks with PSA Peugeot Citroen Group about supplying the French automaker with small internal combustion engined (ICE) cars—from 1.0-1.3-liter displacement—that it will manufacture in emerging countries.

Mitsubishi currently supplies electric cars based on the i-MiEV as well as SUVs to Peugeot.

The companies in March dropped the idea of forming a capital alliance, but Mitsubishi is still keen to deepen collaboration with Peugeot, as it is looking for ways to boost its cost-competitiveness at a time when rivals are growing bigger through alliances—highlighted by the partnership between the Nissan Motor Co.-Renault SA team and Daimler AG.

Mitsubishi hopes to have an agreement with the French firm by the end of this year. The autos that would be supplied to Peugeot are 1.0-1.3 liter cars the Japanese company is developing as global strategic models. Mitsubishi will use its technology for making minivehicles small and light to achieve high fuel efficiency.

Mitsubishi plans to begin manufacturing the small cars in Thailand in fiscal 2011, and will consider mass production in China, India and Brazil as well, according to the report. Targeted annual production is 400,000 to 500,000 units within several years.