Mitsubishi has been experiencing drastic decline in sales since past few months. It has deferred its small car project for India for an indefinite period. The company planned to launch the premium compact car through its technical tie-up with the Birla Group-promoted Hindustan Motors in 2011-2012. Hindustan Motors Limited expects flat sales of Mitsubishi models over the past fiscal and foresees margins under pressure due to change in dollar value.

"We had total Mitsubishi sales of 4,400 vehicles last year...this year also we would be doing the same," said Y.V.S. Vijay Kumar, Executive Vice President. "We were going rapidly in the first 6-7 months of the fiscal, and then the bottom fell off," he said. Although sales figures were better in February but the experts fear tougher times ahead.

Mitsubishi had planned to either re-engineer a compact car from its existing portfolio or build a complete new car from scratch that could be its global model and would be exported to other countries as well.