TOKYO -- Mitsubishi Motors Corp. said on Friday it would get a lifeline of $5.25 billion in a second bailout in eight months, and widened its loss forecast as it battles a plunge in sales.

After receiving a $4.8 billion bailout from the Mitsubishi group, investment funds and others last year, Mitsubishi Motors is still in dire need of cash to shore up its finances, pay for restructuring steps and develop new cars.

The maker of the Pajero sport-utility vehicle has seen its sales plunge in Japan after its past practice of hiding vehicle defects resurfaced last year and tainted its brand image.

Sales in the United States are also tanking by double digits as it fails to lure customers with its "best-backed cars" warranty campaign, leaving Mitsubishi Motors to rely on emerging markets in Asia and Europe for growth. As part of a new revival plan, three core Mitsubishi group companies -- Mitsubishi Corp., Mitsubishi Tokyo Financial Group Inc. and Mitsubishi Heavy Industries Ltd. -- agreed to inject a combined 270 billion yen ($2.63 billion) into Mitsubishi Motors mainly through the purchase of yet another round of new shares.

The amount includes 50 billion yen of Mitsubishi Motors' debt that the Bank of Tokyo-Mitsubishi agreed to swap for equity.

Mitsubishi Motors said it also planned to raise a total 270 billion yen, of which 240 billion yen would be in new loans.

To make way for a fresh start, Mitsubishi Motors said its top three executives, Chairman and Chief Executive Officer Yoichiro Okazaki, Vice Chairman Koji Furukawa and President and Chief Operating Officer Hideyasu Tagaya, stepped down effective Friday.

Takashi Nishioka, chairman of Mitsubishi Heavy, takes over as CEO and Osamu Masuko, Mitsubishi Motors' managing director in charge of overseas operations and a Mitsubishi Corp. veteran, will replace Tagaya in an attempt to put the automaker firmly in the hands of the Mitsubishi group.

"As you know, Mitsubishi Motors is severely injured," Nishioka, who will remain chairman of Mitsubishi Heavy, told a news conference. "But I believe that with the proper management, this company has a bright future."

With no end to the sales slide in sight, Mitsubishi Motors now expects to sell 1.337 million vehicles in the year to March 31. That is 190,000 units fewer than the previous year and down from the 1.4 million units forecast in November.

Hit by sliding sales and provisions to account for a fall in the value of its assets, Mitsubishi Motors widened its full-year net loss forecast to 472 billion yen from 240 billion yen projected two months ago.

It said it hoped to return to net profit in the fiscal year ending March 2007, one year later than originally planned.

Mitsubishi Motors is also expected to pay tens of billions of yen in damages to compensate DaimlerChrysler AG for recall problems at Mitsubishi Fuso Truck & Bus Corp., part of which it sold to the German auto maker before the scandal.

FULL CIRCLE

With the purchase of 50 billion yen in Mitsubishi Motors' stock, Mitsubishi Heavy's stake will rise to 15 percent. The machinery maker will bring the automaker, which it spun off in 1970, under its umbrella once again. The three Mitsubishi group companies will collectively hold 34 percent of Mitsubishi Motors.

Analysts have said, however, that it remained to be seen whether Mitsubishi Motors would be able to pull off a lasting recovery in its core operations without a radical overhaul and a strong automotive partner. "The additional capital injection might have removed one worrying factor, but the main point is whether the company can make a profit," said Yoshihisa Okamoto, senior vice president at Fuji Investment Management.

"Until we see profits out of the firm, it's hard to say it's on its way to recovery," he added.

In one small step forward, Mitsubishi Motors said it expected to sign an agreement to supply SUVs to France's PSA Peugeot Citroen in Europe on an original manufacturing equipment basis.

It signed a similar pact with Nissan Motor Co. this month to supply minicars in Japan as it tries to cut losses at underused plants.

Mitsubishi Motors said it also planned to trim back the number of low-volume models in smaller markets and concentrate its efforts on high-margin products.

Mitsubishi Motors said it also planned to trim back the number of low-volume models in smaller markets and concentrate its efforts on high-margin products.

In one small step forward, Mitsubishi Motors said it expected to sign an agreement to supply SUVs to France's PSA Peugeot Citroen in Europe on an original manufacturing equipment basis.