TOKYO: Mitsubishi Motors Corp. is considering closing an automobile plant of subsidiary Pajero Manufacturing Co. in Gifu Prefecture, central Japan, informed sources said Wednesday.

Mitsubishi Motors aims to cut fixed costs because its new vehicle sales are slumping due chiefly to weak demand caused by the coronavirus pandemic, the sources said.

The automaker is expected to include the envisaged plant closure in a new medium-term business program to be announced Monday.

The subsidiary builds such SUVs as the Pajero and the Outlander as well as the Delica D:5 minivan. Production adjustment is going on there from April due to the COVID-19 crisis.

Mitsubishi Motors was in dire straits even before the crisis struck, owing to lingering effects from its fuel economy data manipulation scandal, which came to light in 2016.

The coronavirus outbreak has dealt an additional blow to the company.

For the year through March 2020, Mitsubishi Motors logged a group net loss of 25.7 billion yen. Its domestic vehicle sales in April-May dived over 60 pct from a year before.

The company hopes to reduce its fixed costs by 20 pct by the year through March 2022. The plant closure will be among the measures to hit the target.

JIJI Press