Mitsubishi Motors developing low-cost car

BEIJING (Reuters) - Japan's Mitsubishi Motors is working on developing a low-cost car to be sold in China and Thailand as well as in the European market, the company's top executive said on Sunday.

The car would be based on a 660cc vehicle platform that is currently used only in Japan and was expected to be launched in 2010, President Osamu Masuko told reporters at the Beijing Auto Show

Mitsubishi Motors would aim to price the car, which would likely have a one-liter engine, below 1 million yen ($9,650).

"The mini vehicle business in a sense is a weakness because they are only sold in Japan," Masuko said.

"But we can turn this into a strength by building a global car using the platform."

Masuko also said the company's initial 2008 U.S. sales target would be tough to meet, citing the latest industry forecasts for total sales volume to be as low as 14.5 million vehicles this year.

Mitsubishi had initially forecast its U.S. sales to fall by about 10,000 units this year.

The company also announced plans to increase capacity at two Chinese engine plants in which it has minority stakes.

The two plants, building 1.3-2.2 liter engines, can currently produce a combined 470,000 engines, which would be raised to about 900,000 in the near term to meet increasing demand.