International Electronics Business News Due to the popularity of pure electric vehicles (EV) and the increasing appeal of Chinese local corporate brands, Mitsubishi Motors has recently finalized its policy of withdrawing from automobile production in China.

According to Nikkei Asia, Japan's Mitsubishi Motors will decide to officially stop producing cars in China. The company hopes to withdraw its investment in the local joint venture with Guangzhou Automobile Group. The joint venture with Guangzhou Automobile Group may be retained, but GAC may take over its operations in China. The production base is currently under negotiation.

Mitsubishi Motors will withdraw production from its Changsha plant in Hunan Province, which is operated by GAC Mitsubishi Motors, a joint venture with its joint venture partner Guangzhou Automobile Group. For Mitsubishi Motors, this is currently the only new car factory in China. Affected by sluggish sales, the factory has stopped producing new cars since March and will give up restarting it.

In the future, the factory is considered to be used as a pure electric vehicle production base of Guangzhou Automobile Group, which will minimize the impact on employment. In 2012, the GAC-Mitsubishi joint venture automobile company was established, in which GAC Group Co., Ltd. holds 50% equity, Mitsubishi Motors Corporation holds 30% equity, and Mitsubishi Corporation holds 20% equity. The joint venture will remain, but Mitsubishi Motors and Mitsubishi Corporation are expected to withdraw their capital contributions.

Mitsubishi Motors began exporting commercial vehicles to China in the 1970s, and launched a joint venture with Southeast Motors from 2006 to 2021. GAC Mitsubishi was established in 2012. In its heyday, sales reached 140,000 vehicles in 2018.

However, in 2016, Mitsubishi was in crisis due to the so-called falsification of fuel efficiency tests. At the stage when new energy was gaining popularity and occupying the market, it failed to adjust its strategic decisions in the Chinese market in time, causing the entire automobile industry to rapidly lose competitiveness.

Mitsubishi Motors' sales in China will drop by 60% year-on-year in 2022, to only 38,550 vehicles. In order to stimulate sales, a hybrid version of the new car "OUTLANDER" was launched for the Chinese market in December 2022, but sales were significantly lower than planned.

In the first quarter of 2023, due to sluggish sales of Outlander and other models, GAC Mitsubishi announced the suspension of production at its factory in Changsha, Hunan. In the second quarter, the production and sales data released by GAC Group directly omitted GAC Mitsubishi's data, triggering widespread speculation in the industry. , the official response at the time was that the data of GAC Mitsubishi was merged into other items, and the sales volume was too low to be listed separately.

In fact, news about Mitsubishi Motors' suspension of production in China has spread frequently in recent months. On September 27, multiple media reported that Mitsubishi Motors had decided to stop automobile production in China due to sluggish sales. At that time, Tetsuji Inoue, head of Mitsubishi's public relations department, responded by claiming that the report was not official news released by the company, and that it was continuing to dialogue with shareholders and had not made any decisions.

It is reported that with the withdrawal of production from China, Mitsubishi Motors' funds will be redirected to operations in Southeast Asia and Oceania, as these regions account for about one-third of full-year sales.

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