Mitsubishi Motors Corp. announced Wednesday that it will introduce the compact Z car to the domestic market in 2002 and to the European market in 2004 as part of a capital alliance with DaimlerChrysler AG.

Speaking about its midterm management plan for the fiscal 2000-fiscal 2003 period, Mitsubishi Motors President Katsuhiko Kawasoe said the company will market the Z car — dubbed its “first world strategic compact passenger vehicle” — in other Asian countries early next century.

“We hope that annual sales of the Z car will reach a total of 400,000 to 600,000 units in the world,” he said, adding that developing and manufacturing the vehicle is the key project with DaimlerChrysler.

The Z car will have engine displacement of 1,000cc to 1,500cc.

According to the midterm plan, Mitsubishi is planning to increase sales in North America from about 260,000 vehicles in 1999 to 400,000 in 2005 and develop vehicles targeting American consumers.

The plan’s other major goals include cutting costs for passenger car operations by 500 billion yen and for trucks and buses by 150 billion yen. It also aims to slash group interest-bearing debts from the current 1.5 trillion yen to less than 1 trillion yen by the end of March 2004.

Mitsubishi Motors and DaimlerChrysler announced last month that the German-American automaker will acquire a 34 percent stake in the Japanese firm. Under the agreement, Mitsubishi will cooperate with DaimlerChrysler for manufacturing and selling passenger cars.

Mitsubishi formed a capital alliance last year with Sweden’s AB Volvo, with the two automakers planning to establish a truck and bus company by the end of 2001.

Asked about the merger of Volvo and Renault SA’s truck division, announced Tuesday, Kawasoe said that as the two firms produce similar vehicles, the merger will not bring any merits to Mitsubishi.