Mitsubishi Motors will stop producing vehicles in China, in the latest sign of retreat by foreign automakers in the world’s biggest car market.
Following weeks of speculation, Mitsubishi Motors confirmed that it would wind down local manufacturing and exit a long-running joint venture in mainland China. In a statement, the company said it had decided to “fundamentally” shake up its strategy for the fiercely competitive market amid a slump in sales.
“The shift to electric vehicles is accelerating faster than expected, and consumers are rapidly undergoing significant changes in their brand and segment choices,” Mitsubishi said.
The company suffered a decline in sales due to these shifts over the last two to three years, it added.
“We tried to recover our sales volume by releasing a new model in December 2022, but we continued to fall short of our plan and have suspended our production since March of this year in order to adjust our inventory,” it said.
Now, as it revamps its business, Mitsubishi will transfer its stake in its Chinese joint venture to existing partner Guangzhou Automobile Group Company (GAC), which will continue to use the production site for electric vehicles. After the sale, GAC will be the sole owner of the unit, which was set up in 2012.
Mitsubishi said it expected to incur a loss of ¥24.3 billion (approximately US$162.2 million) for the fiscal year ended March 2024 as a result of the restructuring. The company did not immediately respond to a request for comment on whether it would continue to sell imported cars in the country. The move came days after Stellantis, home to brands such as Jeep and Chrysler, moved to withdraw further from China, too.
Recently, the company agreed to sell key assets it had jointly owned with its Chinese partner, Dongfeng Motor Group, Dongfeng said in a stock exchange filing. Under the deal, the Chinese automaker will take over land use rights and buildings in the Chinese cities of Wuhan and Xiangyang that had previously been dedicated to the production of Peugeot and Citroën vehicles. The sale is worth about RMB 1.7 billion (US$232.5 million).
It fits into a broader shift for Stellantis, which announced in July 2022 that it would switch to a so-called “asset-light approach” in China, moving to terminate its joint venture in the country. The decision to end that partnership was unexpected because Stellantis had previously tried to raise its stake in the business, even as the CEO of the global carmaker was alluding to problems linked to rising “political influence.”
Later, in October 2022, that joint venture filed for bankruptcy. Stellantis continues to sell imported vehicles in China through dealerships. Mitsubishi has made plans to step up investment elsewhere. The company announced its backing of Ampere, an electric vehicle unit set up by French automaker Renault. The Japanese firm will pour up to €200 million (US$212 million) into Ampere, helping it push further into the European market.
Stories You May Have Missed:
EMO Hannover 2023 Amplified Taiwan Prowess In Machine Tool
New Recipe For Efficient, Environmentally Friendly Battery Recycling
China Car Sales Up In September; Exports Rise 50%
Research Warns Coal Industry Faces 1 Million Job Losses From Global Energy Transition
EcoGraf Evaluates Battery Anode Material Manufacturing Facility Development In Vietnam
The Rise of Additive Manufacturing In Vietnam
METALEX VIETNAM 2023 Showcases Advanced Metalworking, Industrial Solutions
EMO Hannover 2023 Scores With Innovative Solutions For Today’s Challenges
EMO Hannover Opens With Great Sense Of Optimism
TANAKA Establishes Production System in China for Fuel Cell Electrode Catalysts
Samsung Automates Semiconductor Packaging
WANT MORE INSIDER NEWS? SUBSCRIBE TO OUR DIGITAL MAGAZINE NOW!
Letter to the Editor
Do you have an opinion about this story? Do you have some thoughts you’d like to share with our readers? APMEN News would love to hear from you!
Email your letter to the Editorial Team at [email protected]