Sluggish sales and the rise of local brands: Mitsubishi Motors to end vehicle production in China

Mitsubishi Motors is pulling out of the Chinese market.

The Japanese automaker has already started final talks with its partner company, Guangzhou Automobile Group (GAC). Mitsubishi said it is exiting the Chinese market because of sluggish sales, the rising popularity of electric vehicles (EV) and local brands stepping up their game.

Other Japanese brands are also struggling against the homegrown competition, which may indicate that they must review their strategies for the Chinese market.

Mitsubishi was only able to sell 38,550 units in China in 2022, down about 60 percent from what it was able to sell in 2021. To help reverse the trend, the Japanese automaker launched the hybrid Outlander SUV for the Chinese market, but failed to capture its desired sales.

What happens next?

As for its production facilities in China, Mitsubishi said it had already halted vehicle production in Hunan province on March 2023, its only factory in the People’s Republic.

It's not all bad news for the facility as GAC will use it to produce EVs and maintain a certain employment level. 

Currently, the joint venture between GAC and Mitsubishi has the following breakdown: GAC has a 50 percent stake, Mitsubishi Motors has a 30 percent share and the remaining 20 percent is owned by Mitsubishi Corporation.

Regarding the partnership after the pull-out, the GAC Mitsubishi venture will still exist, but Mitsubishi Motors and Mitsubishi Corp. will withdraw their investments.

Mitsubishi will now focus its resources elsewhere, targeting the Southeast Asia and Oceania regions that account for a third of the Japanese brand’s sales globally.

Did you like our story? Make sure to give it a 5-star rating if you enjoyed it.