[10] An entirely hand-built seven-seater sedan based on the FIAT Tipo 3, it proved expensive compared to its American and European mass-produced rivals, and was discontinued in 1921 after only 22 had been built.

Following the successful introduction of the first Galant in 1969 and similar growth with its commercial-vehicle division, the company decided to create a single operation to focus on the automotive industry.

Mitsubishi Motors Corporation (MMC) was formed on 22 April 1970, as a wholly owned subsidiary of MHI under the leadership of Tomio Kubo, a successful engineer from the aircraft division.

It was chosen by Iwasaki Yatarō, the founder of Mitsubishi, as it was suggestive of the emblem of the Tosa clan who first employed him, and because his own family crest was three rhombi stacked atop each other.

In 1977, the Galant was sold as the Chrysler Sigma in Australia.By 1977, a network of "Colt"-branded distribution and sales dealerships had been established across Europe, as Mitsubishi sought to begin selling vehicles directly.

However, this expansion was beginning to cause friction; Chrysler saw their overseas markets for subcompacts as being directly encroached by their Japanese partners, while MMC felt the Americans were demanding too much say in their corporate decisions.

Mitsubishi Motors finally achieved annual production of a million cars in 1980, but by this time, its ally was not so healthy; as part of its battle to avoid bankruptcy, Chrysler was forced to sell its Australian manufacturing division to MMC that year.

Diamond-Star Motors (DSM)—from the parent companies' logos: three diamonds (Mitsubishi) and a pentastar (Chrysler)—was incorporated in October 1985, and in April 1986, ground was broken on a 1.9-million-square-foot (177,000 m2) production facility in Normal.

Initially, three platform-sharing compact 2+2 coupés were released, the Mitsubishi Eclipse, Eagle Talon, and Plymouth Laser, with other models being introduced in subsequent years.

The capital raised by this initial offering enabled Mitsubishi to pay off part of its debts, as well as to expand its investments throughout Southeast Asia, where it was by now operating in the Philippines, Malaysia, and Thailand.

Hirokazu Nakamura became president of Mitsubishi Motors in 1989, and steered the company in some promising directions, with the advent of the Japanese asset price bubble "market correction" that led to the Lost Decade as a result of the Plaza Accord agreement signed in 1985.

While Mitsubishi was riding high off of profitable vehicles such as the Diamante and Pajero, Honda was caught off-guard with the SUV and truck boom, and was losing focus after the illness and later death of its founder.

Honda CEO Nobuhiko Kawamoto took drastic steps, though, such as exiting Formula 1 and discontinuing unprofitable vehicles to avert a Mitsubishi takeover, which proved effective.

[21] Slow-selling vehicles were eliminated from the U.S. market, purchase projections for the Global Engine Manufacturing Alliance have been scaled back, and 10,000 jobs were shed to cut costs with 3,400 workers at its Australian plant and other loss-making operations still under threat.

Meanwhile, in an effort to increase production at its U.S. facility,[22] new export markets for the Eclipse and Galant were being explored in Ukraine, the Middle East, and Russia, where the company's bestselling dealership is located.

[23] Mitsubishi Motors has also been active in OEM production of cars for Nissan,[24] and announced a similar partnership with Groupe PSA in July 2005 to manufacture an SUV on their behalf.

[40][41] Samcor also made a version of the Mazda 323 for the UK market called the Sao Penza,[42] which was a marque like Lonsdale YD41, invented to get around British import quotas.

Production of European market-bound Mitsubishi Outlanders, and badge-engineered versions of this vehicle, were also manufactured in the Netherlands until 2012, when the company sold the plant to the Dutch industrial conglomerate VDL Groep.

[48] Mitsubishi has been allied with PSA Group since 1999, after they agreed to co-operate on the development of diesel engines using the Japanese company's gasoline direct injection technology.

due to cancellation of larger sedans, the sales channels have been combined into one franchise that sells all models, including kei cars and commercial delivery vehicles.

[citation needed] The benefits Mitsubishi Motors had seen because of its strong presence in Southeast Asia reversed themselves as a result of the economic crisis in the region, which began in 1991 with the advent of the collapse of the Japanese asset price bubble, referred to in Japan as the beginning of the Lost Decade and continued to 1997.

The collapse was partly the result of the Plaza Accord agreement in 1985, which sought to equalize the United States dollar with the Japanese yen and the German mark.

However, with a comparatively small percentage of the American market, the turmoil in the Asian economy had a greater effect on Mitsubishi Motors, and the company's 1997 losses were the worst in its history.

Kawasoe unveiled an aggressive restructuring program that aimed to cut costs by ¥350 billion in three years, reduce personnel by 1,400, and return the company to profitability by 1998.

[citation needed] In what was referred to as "one of the largest corporate scandals in Japanese history",[63][64] Mitsubishi Motors was twice forced to admit to systematically covering up defect problems in its vehicles.

Initially, sales leapt, but at the end of the year's "grace period", numerous credit-risky buyers defaulted, leaving the company with used vehicles for which they had received no money and which were now worth less than they cost to manufacture.

Despite an investment of A$600 million developing the car, initial sales projections proved optimistic; after only six months, Mitsubishi scaled back production from 90/day, and reduced the working week from five days to four.

[87] Mitsubishi Motors started selling its i MiEV, the all-electric minicar with a lithium-ion battery pack tucked under its floor, to retail customers in the summer 2009, a year ahead of schedule.

In an auspicious debut, the diminutive rear-engined sedan swept the top four places in the "Under 750 cc" category, with Kazuo Togawa taking class honours.

It then scored its first outright Group A victories with a Galant VR-4 in the late '80s, Mitsubishi homologated the Lancer Evolution, and in the hands of Finland's Tommi Mäkinen, winner of the drivers' title for four consecutive years (1996–1999), they won the manufacturers' championship in 1998.