Aug. 20 (Bloomberg) -- Mitsubishi Motors Corp., Japan's only unprofitable carmaker, said the drop in domestic car sales has ``hit bottom'' and the decline will slow later this year with a new Colt compact car model.

August sales probably fell less than 50 percent compared with the same period last year, Vice Chairman Koji Furukawa said in an interview. Sales have declined every month this year, culminating in a 52 percent drop in July.

The carmaker is trying to win back trust from consumers after recalling more than 800,000 Mitsubishi-brand vehicles in Japan this year. Police arrested more than 10 former executives over two fatal accidents involving the company's trucks in 2002. Furukawa, 66, is leading a division to promote corporate social responsibility.

The slide in sales``has hit the bottom,'' said Furukawa. ``We don't expect a further decline.''

Tokyo-based Mitsubishi Motors plans to introduce a new version of the Colt compact car in October to further slow the sales decline. The maker of the Pajero sport-utility vehicle will meet its target of selling at least 220,000 units in Japan in the year ending March 31, Furukawa said. That would be a 39 percent decline from the previous year,

Shares of Mitsubishi Motors were unchanged at 77 yen at the 3 p.m. close in Tokyo. The stock is the worst performer in the benchmark Nikkei 225 Stock Average, falling 65 percent this year.

The carmaker is reviewing more than 579,000 customer complaints, company minutes and other documents from as far back as January 1979. It is investigating whether past management concealed defects. The company plans to announce the results on Aug. 26.

Furukawa became the vice chairman at the automaker in June. He started his career at Mitsubishi Corp., Japan's largest trading company, in April 1962. He became a general manager of public relations at Mitsubishi Corp. in June 1989 and was promoted to vice president in June 2001. He was also a compliance officer at the trading company in October 2001.

To contact the reporter on this story: Naoko Fujimura in Tokyo at nfujimura@bloomberg.net

Last Updated: August 19, 2004 11:01 EDT