Although Mitsubishi is set to reduce its European dealer network by 20% over the next five years, the focus in the UK is on growth in the medium term.

Mitsubishi Motors Europe president and chief executive Stefan Jacoby has revealed plans for a pruning of its European dealer network from 2,900 to 2,500 between now and 2007. But Mitsubishi UK MD Jim Tyrell said the company has plans for an expansion of its dealer network from 140 to 150 by the end of 2003.

The optimism in the UK network stems from a substantial turnaround in dealer profitability. Mitsubishi dealers will this year record a 2% return on sales, compared to 1% in 2001 and a loss in 2000.

The turnaround has been a result of substantial cost savings - Mitsubishi UK saved £4m a year on fixed costs alone over the last two years thanks to a 75% reduction in product complexity - combined with a substantial boost in sales. The sales hike was further fuelled by a 15% realignment in prices.

Says Tyrell: “ We are forecasting to sell more than 26,000 units in the year 2002 - that's 17% up on last year and 44% up on 2000.”