Mitsubishi plans to extend its dealer network to 150 by the end of 2003 ready for the launch of the CZ2 revealed at the Tokyo show.

Powered by 1.3 and turbocharged 1.5-litre engines, the 3dr and 5dr CZ2 will be built alongside a new 4dr Smart car at factories in Japan and Holland. The new B-sector contender will be available in Europe from 2003.

Mitsubishi has growing its dealer network from 110 to 126 outlets over the past 12 months, attracting retailers with the promise of improved profits.

Last year dealers typically made profit of just 0.2% of sales, with the top 25 achieving 1.3%. The target for 2001 was set at an average of 1%, but this was revised to 1.5% in June following strong retail sales.

In September the average profitability was 3% of sales, taking the year-to-date figure to 1.5%. Top 25 dealers achieved 5.1% in September and have made profits of 4.3% in the year-to-date. The target for the entire network has been set at 2% of sales next year, by which time Mitsubishi should have 140 dealers.

Marketing efforts for the model range are concentrating on the high-roof Space Star hatchback. Strong incentives are expected to boost sales from 3,300 in 2001 to 5,000 next year. This growth is expected to compensate for the declining sales of the ageing Colt hatchback and unloved Carisma.

Mitsubishi expects to retail 22,500 units this year, with improving sales of 4x4 vehicles expected to lift volume to 25,000 in 2002 - 1,500 above the previous record for the brand.

Paul Williams, Mitsubishi sales and marketing director, said: "Revised pricing has helped to see off the grey import competition for our off-roaders. We have increased our market share in all sectors of the four-wheel-drive market and sold more premium product."

Mr Williams also revealed the internet was now the most common route for customer enquiries.

"People do not phone or visit dealers any more," he said. "They send e-mails instead. The speed and efficiency with which dealers respond is one of the main differentiators between our top 25 dealers and the remainder of the network."