Mitsubishi had hopes in 2007 that its protracted performance slump in the U.S. market was making a turnaround, but current economic conditions have derailed those modest gains.

Last year the company enjoyed its first increase in annual sales since 2002, a gain of 8.8 percent for 128,993 units sold. For the fast half of this year, however, sales were down 23.4 percent including a devastating 42.4 percent loss in June.

The only model that has enjoyed reasonably strong sales in the face of rising gasoline prices is the small, fuel efficient Mitsubishi Lancer, , but unfortunately supplies have fallen far short of potential demand. With fuel efficiency at 22 mpg city and 30 highway, the Lancer still has seen a sales decline of 8.9 percent in the United States from June 2007 to June 2008 because most of the units produced are being sent to Russia.

In recent weeks Mitsubishi closed two of its four field offices in the U.S. and slashed 49 sales positions while also divesting itself of many dealer ad associations. One possible avenue to help this flagging situation lies in plans for Mitsubishi Credit to return to retail financing with a focus on higher-risk customers.

Even with the potential for easier car loans, however, the company is plagued by a highly limited model line with no standouts. Both the Galant sedan and Endeavor crossover are overdue for an upgrade. The Galant was last re-dedesigned in 2004, while the Endeavor saw minor modifications in 2006. The Raider pickup, with only 1,128 units sold in 2008, is nothing short of a disaster.