Mitsubishi Motors Corp. president Rolf Eckrodt said on Oct. 21 the Japanese carmaker's battered United States operations are on the mend, adding that high incentive levels will last only until sales momentum picks up, Reuters reported.

The U.S. operations of Japan's fourth-largest car maker, which is 37 percent owned by DaimlerChrysler, have been in tatters since Mitsubishi drastically altered its strategy to focus on credit-worthy clients instead of young, ethnically diverse customers, many of whom failed to keep up payments, the report said, adding that, since then, Mitsubishi has seen double-digit falls in its U.S. sales from the previous year's levels, forcing it to raise incentives to sell its cars and reduce inventory.

"We had to rethink our strategy on the financial services side," Eckrodt said at a motor industry conference, according to Reuters.

"We organized a different system to go for a check of customers and for a higher quality of customers, which means a lower volume for the moment.

"We're fighting to come back to the original volume. And (the sales now are being done by) tough dealers and unfortunately by higher incentives - for the time being, I hope," he reportedly added.

The approach is in stark contrast with that of domestic rival Nissan Motor, whose president Carlos Ghosn said earlier at the same event that his company would not raise incentives and sacrifice profits for the sake of volume, Reuters said.

"We are aware of what we did and we are aware of what we have to do and I think all things are in place and we are expecting results out of that," Eckrodt said, according to Reuters, adding: "All these measures are on repair."

The news agency noted that ratings agency Standard & Poor's, however, lowered its corporate credit rating on Mitsubishi Motors to "B+pi" from "BB-pi" on Oct. 21, citing credit losses and a worsening sales performance in North America.

It said the rating could be lowered further if the credit-loss situation worsens, or deterioration in Mitsubishi's U.S. performance accelerates significantly in the near term, Reuters said, noting that the agency uses "pi" to indicate that the rating is based on publicly available information.

Reuters said losses at Mitsubishi's North American finance unit and weak U.S. sales prompted the car maker to slash its earnings outlook in July, to a net loss of 80 billion yen ($725 million) for the April-September period, down from an earlier profit projection of 10 billion yen.

For the full year, Mitsubishi cut its group net forecast to 10 billion yen from 40 billion yen, but many analysts believe even the lowered projection is optimistic, as the dollar's fall eats into its profits, the report added.

Mitsubishi also cut its retail sales estimate for North America to 340,000 vehicles this business year, from 370,000, Reuters said, adding that the company is due to announce half-year earnings results in mid-November.