Frankfurt, Tokyo --

DaimlerChrysler AG insisted yesterday that Mitsubishi Motors Corp. remains a key Asian ally, even while the scandal-hit Japanese car maker reported a 52-per-cent drop in domestic sales in July. The German-American group dismissed as "wrong" a newspaper report that Mitsubishi Motors was set to cancel some joint development pacts that had survived Daimler's surprise decision this year not to continue bailing out Japan's only loss-making auto company. "Mitsubishi remains one of our strategic partners in Asia, and all alliance projects that make economic sense for both partners will continue," a Daimler spokesman said. Any move by Mitsubishi to loosen its business alliance with DaimlerChrysler would deepen the rift between the allies at a time Mitsubishi is trying to recover from a defect cover-up scandal that has driven customers away from the brand. DCX (NYSE) rose 44 cents (U.S.) to $42.07. Reuters