To challenge the powerful Citroëns, two 1995 models were developed in preparation for the 1995 Dakar. A new and improved prototype with a lower ground clearance and wheel travel comparable to Citroën's was introduced. The MITSUBISHI MOTORS Team fielded three prototypes to take on the fight. The new model was entrusted to Saby, while Shinozuka and Fontenay were driving an improved version of the 1994 car. In line with the previous year's strategy, Masuoka and Ponsawan participated in T2 specification short wheelbase PAJERO/MONTERO versions. To emphasize the new prototype's ability to effectively face the challenges of the desert, the track and wheelbase were increased, while the body was widened to over two meters. The front tire size remained at 18 inches as before, but the rear ones required a larger air volume so the wheels were downsized to 16 inches, along with excellent shock absorbing properties . The car carried four spare tires, which were installed in the rear cowl rather than between the side sills to improve the ramp break-over angle because of the longer wheel base. The stroke of the 4G63 type gasoline turbo engine was increased and its displacement was raised to 2.4L. In addition, a secondary air introduction system was adopted for improved responsiveness. The maximum power of 350PS was unchanged due to the regulations limiting the air restrictor diameter to 45 mm, but the maximum torque was further enhanced to reach 60 kg-m.

The 17th event was the first Dakar Rally to start from Granada in southern Spain instead of Paris and the event was called the "Granada-Dakar". The new course included a pre-start in Venice, Italy then onto Brussels, Belgium on December 26, continuing on to Paris, France on December 27 and the following day to Barcelona, Spain. Scrutineering took place in Granada, where the rally actually started. After the participants moved onto Morocco across the Strait of Gibraltar, the event entered Mauritania via the Western Sahara region with a rest day in Zouérat, the largest town in northern Mauritania. The second half of the race took the competitors to Labé in northwestern Guinea then into southern Senegal, before heading north to the finish in Dakar. The event distance amounted to 7,526 km, of which the competitive stages (SS) totaled 5,712 km.

The rally’s highlight was the one-on-one battle between the Citroëns and the PAJERO/MONTEROs. Citroën's Vatanen, who had taken the lead straightaway, suddenly faltered due to a crash. Citroën's Lartigue stormed ahead and Saby’s PAJERO/MONTERO fought to reach the top of the leaderboard, but in the second half of the race, Saby was struck by suspension troubles on a high-speed stage in Bakel in eastern Senegal. Despite this troubless, Saby finished second overall, with Shinozuka third and Fontenay fourth. In the modified production car class, Ponsawan and Masuoka achieved an impressive 1-2 finish, with the PAJERO/MONTERO clinching its seventh victory in that class, the third in a row. They also claimed ninth and tenth overall. Jutta Kleinschmidt of Germany, a female driver who had participated in the motorcycle category until the previous year and debuted in the car category with the T1 specification PAJERO/MONTERO, finished second in that same class and first in the women's category.