The Japanese Mitsubishi Motors Corporation announced on October 24th that it will end production of vehicles in China, and that it will end car sales in China once the company’s existing inventory is depleted. The company’s decision was driven by the rapid rise of local Chinese electric vehicle (EV) companies (negatively impacting Mitsubishi’s own EV car sales) as well as the downturn in sales of Mitsubishi’s gasoline cars.
Mitsubishi’s board of directors has finalized the withdrawal from China; the company’s 2023 fiscal year statements will include a 24.3 billion yen (approx $172 million) special loss from the departure. Going forward, Mitsubishi intends to focus its resources on the market in Southeast Asian.
Mitsubishi launched a new Outlander hybrid vehicle in China in December 2021 but sales fell short of expectations. From January to August 2022, Mitsubishi’s sales in China almost halved, dropping 47.6% year-over-year. Besides Mitsubishi, other Japanese automakers are also lagging in terms of EV sales within China. Local giant BYD and Tesla dominate China’s EV market. Research firm MarkLines stated that in 2022, Chinese automakers accounted for 51% of passenger car sales within China, while Japanese automakers had only an 18% share of the market.
Mitsubishi’s joint venture GAC Mitsubishi Motors and its plant in China’s Hunan Province, which produced gasoline vehicles, stopped production in March. Mitsubishi will sell its shares in the joint venture and dissolve the partnership, though Mitsubishi’s other joint ventures in China will continue engine production.
Source: Kyodo News, October 24, 2023
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