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Mitsubishi Motors discontinues vehicle production in China, planning exit talks with joint venture partner Guangzhou Automobile Group amidst the electric vehicle market surge.
According to Reuters, Mitsubishi Motors and GAC Motor have a plant in Hunan Province. After the former withdraws, the Chinese auto manufacturing company is likely to convert the facility into its production base for electric vehicles (EV).
Ongoing Talks for Mitsubishi Motors’ China Exit
Based on the reports, the Japanese automaker is also discussing the future of its Chinese business with the shareholders of its JV company that was set up in the country with GAC Motor. At this point, it was said that there is no concrete decision yet.
Two unnamed sources reportedly shared that Mitsubishi Motors is already making final arrangements with Guangzhou Automobile Group so it can smoothly withdraw its business in the region. It was noted that the Japanese vehicle manufacturer had already suspended the local production of its latest Outlander sports utility vehicle model earlier this year, and this was only months after the SUV was launched.
Mitsubishi Motors and GAC JV
As mentioned on Bloomberg, Mitsubishi and GAC’s JV was named the GAC Mitsubishi Motors Co. The partners built a factory in Hunan province, and earlier this year, the former announced it would lay off factory workers.
In July, the JV sent an internal memo to its workers, and the content was widely circulated on various social media platforms in China. The company wrote that its sales plunged way beyond expectations in a market that is quickly moving into EVs.
The decline is apparently one of the major reasons that pushed Mitsubishi Motors to end its business in China. With the increasing production of EVs from Tesla, BYD Co., Kia Motors, Nissan Motor, and Honda in China, Mitsubishi Motors could no longer keep up since more and more customers are also shifting to electric. This explains the company’s continuous poor sales results in recent years.
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