Mitsubishi Motors' Chief Executive Rolf Eckrodt to stand down later this year

Shares in the struggling car company rose 24 yen or 7.45% to 346 yen by lunchtime on Tuesday in Tokyo.

Mitsubishi Motors declined to comment until it announces restructuring plans at a shareholders' meeting on 30 April.

Problems include declining sales in the North American market and scandals involving the recall of vehicles.

High stakes

So far, both the amount and the composition of the capital injection remain unclear.

The Yomiuri Shimbun and Mainichi Shimbun newspapers reported that the funds are needed for restructuring and the amounts required are higher than the $5.5bn that was first suggested.

DaimlerChrylser stressed that it had not reached a decision on whether or not to invest more money in Mitsubishi.

The Japanese press reports predicted that DaimlerChrysler will increase its stake in Mitsubishi Motors to more than 50% in the year to March 2007.

DaimlerChrysler already has a 37% stake in the Japanese automaker and a minority stake in Mitsubishi Motors' best performing unit, Fuso trucks.

Such a move would continue DaimlerChrysler's strategy to raise its presence in the Asian market and to save both money on development and production costs.

Shake-up

Mitsubishi Motors is the fourth largest automaker in Japan - and the only one among Japan's big carmakers failing to make solid profits, following poor performance and quality control problems.

On 9 April this year it announced the recall of 81,531 cars for faulty wheels.

This followed earlier problems in 2000 after confessing it had failed to inform the authorities about 64,000 customer complaints about faulty vehicles going back as far as 1977.

Chief Executive Rolf Eckrodt is thought likely to leave within months.

At the company AGM on 19 February this year he faced shareholder pressure to step down.