Now Mitsubishi's Pajero will directly compete with M&M's Project Scorpio (codename for MUV project) in which the Indian company has made a huge investment. M&M even sold off its stake in Mahindra Ford India Ltd to Ford to generate funds for the Scorpio.

Mitsubishi is currently making its Lancer model in the Chennai plant of Hindustan Motors and has evinced their keen interest to pick up stake in the Calcutta-headquartered company. Industry sources say that Mitsubishi's Pajero can make an entry from the same Chennai plant which is currently producing Lancer.

In a statement, M&M said it has not made any proposal to Mitsubishi to make Pajero in India. ``All the royalty payment with regard to Voyager are being made asscheduled to Mitsubishi,'' M&M and Mitsubishi jointly said in a statement.

Though both company say that they intend to work together to make Voyager a success, the Voyager's steep price of Rs 5.66 lakh is discouraging users to buy. ``Unless, there is a major price cut, Voyager's production is likely to stop,'' M&M insiders said.

The multi-utility vehicle segment will witness hectic activity in January when Japanese automobile giant, Toyota will unveil its model for India. With Tata Safari - popularly known as Pajero-clone - already available in the premium segment of MUV segment, consumers will have choice of over four different vehicles.

For M&M, this would be the third relationship which is on the rocks. Earlier, the Mumbai-based utility and tractor maker broke up with Chrysler.