MITSUBISHI Australia says substantial improvements to fuel economy and cabin refinement – plus a marginally sharper new starting price – will help drive its new-generation Outlander to record sales and return it to the pointy end of the compact SUV sales charts.

The new third-generation model was launched to the media this week, with a starting price of $28,990 plus on-road costs for the front-drive ES petrol – $350 lower than before but tempered by a less powerful 2.0-litre engine – and diesel availability for the first time.

Again available with seven seats when sold in all-wheel-drive guise – unusual for the segment – the new model is said to address common complaints against the old model by softening the cabin plastics and dampening noise, vibration and harshness levels inside.

At this week’s launch – which comes three weeks after the car began arriving in showrooms and almost two months after local pricing was announced – the company said it would target 1000 sales a month for the new model, up more than 30 per cent on the superseded model.

These figures would not only give MMAL a potent one-two punch at the smaller end of the SUV market – with the Outlander to sell alongside the smaller and recently facelifted ASX – but would also be crucial to the company’s goal of growing its overall sales by 20 per cent in 2013.

After a disappointing year that has seen sales drop 2.8 per cent to 54,786 to the end of November – in a market up 9.8 per cent and set to break the existing annual record – the company this week said it wanted to grow annual sales to around 72,000 next year.

This will be aided by not only the new Outlander, but also the Mirage light car due in the first quarter, which will add “at least” several hundred sales per month to the tally after its Colt predecessor was discontinued earlier this year.

The new Outlander arrives amid a barrage of activity from other contenders in the hotly contested compact SUV market, with the imminent local release of all-new contenders including the fourth-generation Subaru Forester and latest Toyota RAV4 in February.

Mazda is also gearing up to offer a more powerful 2.5-litre SkyActiv petrol version of its popular CX-5 early next year, while Honda lobbed its new CR-V last month priced $1500 lower than the Mitsubishi.

While front-drive Outlander models are powered by a 110kW/195Nm 2.0-litre petrol engine, all-wheel-drive models come with a largely carried-over 124kW/220Nm 2.4-litre MIVEC petrol unit (actually 1kW and 6Nm down on the old one) or a 110kW/360Nm turbo-diesel engine.

The newly developed oil-burner, which will replace the 169kW/291Nm 3.0-litre V6 petrol, consumes a claimed 5.8 litres of diesel per 100 kilometres (0.1L/100km more than the Mazda CX-5 diesel but almost half that of the V6), matched exclusively to a six-speed automatic transmission and AWD.

The entry-level 2.0-litre petrol engine’s fuel consumption is rated at 6.6L/100km when paired with a CVT (continuously variable transmission) auto or 7.0L/100km with a five-speed manual.

The 2.4-litre engine that lives on for AWD variants is only available with the CVT and consumes 7.5L/100km – almost 17 per cent better than the outgoing model’s 9.0L/100km.

Mitsubishi attributes the improved fuel consumption to the new Outlander’s lighter 1610kg weight, improved aerodynamics and a new Eco Drive Assistant system that more efficiently runs the engine, air-conditioning and AWD systems while encouraging an efficient driving style through a point-scoring system.

MMAL will add a segment-first plug-in petrol-electric hybrid option to the local range in mid-2013. This powertrain is capable of a range in excess of 880km, consuming as little as 1.6L/100km.

Neither the diesel engine nor a seven-seat configuration will be offered with two-wheel-drive, because MMAL believes there will be insufficient demand.

Furthermore, despite being available in Europe, the company has not established what it deems a viable business case for a fuel-saving idle-stop system, citing higher running costs associated with the pricier batteries required to handle the loads put through them.

All Outlanders will come with seven airbags, rear parking sensors and hill-start assist.

This week ANCAP announced the expected five-star safety rating for all Outlander models.

Flagship Aspire variants can be specified with a $5500 option pack that includes autonomous emergency braking and an adaptive cruise control system that works down to low speeds for more relaxed driving in slow-moving traffic.

Boot space is 477 litres, expanding to 1608 litres with the rear two rows of seats folded. This is substantially down on the 597L/1691L that could fit in the old model, and is due largely to the raised cargo floor.

Standard equipment includes climate control, cruise control, Bluetooth phone and audio streaming, voice control, auto-folding door mirrors, leather trim on the gear knob and the tilt and reach-adjustable multi-function steering wheel, a six-speaker audio system, an immobiliser, security alarm and 16-inch steel wheels with full-size spare.

The auto-only LS (from $34,990 in 2WD) gains seven-seat capability, dual-zone climate control, a 6.1-inch touchscreen, a reversing camera, 16-inch alloy wheels, rear privacy glass, paddle-shifters (on 2WD) and silver dashboard trim.

Until the hi-tech plug-in PHEV Outlander arrives mid-2013, AWD-only Aspire variants ($43,490 for the 2.4 petrol or $45,490 for the diesel) will serve as range-toppers.

They come with keyless entry and start, automatic headlights and wipers, leather upholstery with front seat heaters, powered driver’s seat adjustment, 18-inch alloys, additional interior and exterior chrome highlights, scuff plates, wood-effect interior trim (said to be faux Eucalyptus) and leather-look door coverings.