With the 2012 departure of Suzuki from the U.S. market, the title of "most challenged" automaker probably passes to Mitsubishi.

While it's backed by a huge Japanese conglomerate, it's a tiny player in the tough North American market, and has had few new products lately.

Now comes news that the company may exit a key segment of global market altogether.

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According to the Australian site CarAdvice, Mitsubishi has halted work altogether on the next generation of its Lancer compact sedan.

The company will instead focus exclusively on a range of SUVs in various sizes, meaning its current sedans may not be replaced for years--if ever.


2014 Mitsubishi Lancer

2014 Mitsubishi Lancer

The news comes in the wake of a proposed deal with France's Renault to derive new Mitsubishi sedan models from Renault designs built in Korea by that company's partner, Samsung.

Under the arrangement, Mitsubishi would have received versions of several Renault sedans to replace its own aging models.

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That deal fell apart, however, due to exchange-rate fluctuations that would have made the Korean-built models too expensive in many markets around the world where Mitsubishi competes.

And during the negotiations, Mitsubishi had suspended its own development programs to replace those cars.


2014 Mitsubishi Lancer

2014 Mitsubishi Lancer

Retreating to a lineup of SUVs isn't necessary all that bad, since global demand for smaller SUVs built on car underpinnings--known in the trade as crossover utility vheicles--is surging, while sedan demand is growing more slowly.

And Mitsubishi Motors president and COO Tetsuro Aikawa noted to CarAdvice that competition in sedans is intense.

“Unfortunately," he said, "for a while we are not planning any development of sedans."

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That means the current Lancer, which is now eight years old, will soldier on for a few more years with a handful of updates.

The money saved by Mitsubishi will also go toward another growing segment: plug-in electric vehicles.

The 2016 Mitsubishi Outlander Plug-In Hybrid has been an unexpected success for the company, and a thoroughly updated version of the Outlander will be shown at the New York Auto Show in April.


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