Discontinued in 1974, the Challenger name returned to the Dodge lineup for 1978 in a completely new formas a compact import coupe manufactured by Mitsubishi in Japan. With slight variations in trim and options, the same package was branded by Mitsubishi as the Galant Lambda, by Plymouth as the Sapporo, and by Chrysler Australia as the popular Sigma.
With no V8 available, this Challenger was marketed not as a muscle car but as a compact personal luxury vehicle. Two four-cylinder engines, a 1.6L and a 2.6L with Silent Shaft balancer, were offered, with a choice of five-speed manual or three-speed automatic transmission.
The emphasis was on luxury and convenience features, including a premium stereo, trip computer, memory seats, and an overhead console with digital clock. Other eye-catching features included two-tone paint and bold interior fabrics.
Dodge was not shy about promoting the Challengers Japanese origins; advertising taglines included Dodge by Mitsubishi and from Japan to Dodge. In 1983, Dodge found itself with multiple sport compacts in its lineup, including the Charger, Daytona, and Conquest, so despite steady sales, the Challenger was discontinued. The name would not appear again until 2006 with an historic unveiling at the North American International Auto Show.