For the 16th running of the event, the MITSUBISHI MOTORS team developed a 1994 model based on the Okazaki Proto No.3 with enhanced aerodynamic performance. While the wheelbase of the car was identical to that of the 1993 model, the track was widened and the suspension stroke increased. Wind tunnel tests showed that the aerodynamic shape of the body drastically reduced air resistance. The engine was radically improved, the maximum power increasing from 320PS to 350PS and the maximum torque from 45 kg-m to 51 kg-m. This was achieved by raising the supercharging pressure, together with improvements to the pistons and a revised shape of the combustion chamber and intake ports. The 1994 model of the PAJERO/MONTERO Prototypes were driven by Shinozuka and Saby while the 1993 model were entrusted to Weber and Fontenay. In addition, Masuoka and Ponsawan continued to participate in T2 specification short wheelbase PAJERO/MONTERO versions.

The 16th event featured a unique "Paris-Dakar-Paris" course that returned to Paris with Dakar as the intermediate U-turn point. It went from Paris to Morocco via Granada, then headed southward on the coastline of Mauritania to reach Dakar. After a rest day, the second half of the competition moved northward again toward Paris through Mauritania, Morocco, and Spain. The total distance was 11,813 km, including 4,714 km of competitive stages (SS), and the finish was at Euro Disney in the suburbs of Paris.

As soon as the full-fledged competition started after landing in North Africa, Bruno Saby dropped the front end of his PAJERO/MONTERO into a gully, losing 4 hours. In the first half, the PAJERO/MONTEROs driven by Shinozuka and Weber followed Lartigue's Citroën until the event’s turnaround point in Dakar. However, in the second half of the event, disaster struck during the 680 km stage from Atar to Nouadhibou in Mauritania, an area nicknamed "The Dunes of Death" by the participants.

The harsh desert conditions trapped all the vehicles in the sand dunes forcing the organizers to cancel the stage for the motorcycle category and to stop the car category at the fifth checkpoint (CP), which was at the 246 km marker. However, the top group of cars that had already managed to get through had to carry on until CP 8 at 376 km. The two Citroëns incurred time penalties because they bypassed that section without going through CP 8. Only the two PAJERO/MONTEROs driven by Saby and Fontenay fought a 30-hour battle to finally make it to CP 8. More than 200 cars got bogged down in the treacherous dunes. However, the organizer canceled the SS sections from the CP5 to CP8 because they assumed that the cars that were yet to arrive would never get through. The organizers imposed a time penalty to the vehicles that were unable to reach CP 5. The MITSUBISHI MOTORS team lodged a protest against the decision, but it was unfortunately rejected. Afterwards, considering the safety aspects resulting from the state of exhaustion among the drivers/navigators, MITSUBISHI MOTORS Team director Ulrich Bremer decided to withdraw the team's prototypes. On the other hand, Masuoka, continued the race and clinched the fourth overall position in the modified production car class. Also, Bob Ten Harkel of Germany won the non-modified production car class, resulting in the PAJERO/MONTEROs winning two categories. Although Saby and Fontenay withdrew from the rally, the MITSUBISHI MOTORS team was awarded a special prize for their fighting spirit and the team's courageous withdrawal was praised by the media.