Mitsubishi Motors announced on Tuesday its withdrawal from engine production operations in China, dissolving its joint venture partnership with local Chinese companies due to declining demand in the market.
The Japanese automaker had previously exited vehicle manufacturing in China in 2023, redirecting its business resources toward more promising markets in Southeast Asia and other regions with stronger growth prospects.
The company’s Chinese operations began in 1997 when Mitsubishi Motors established a joint venture with China Aerospace Automobile and other partners in Shenyang, Liaoning Province. The facility produced engines for both Mitsubishi vehicles and Chinese domestic manufacturers.
Following Mitsubishi’s departure from vehicle production in China, the engine manufacturing plant continued operations. However, the rapid shift in Chinese consumer demand toward pure electric vehicles (EVs) ultimately forced the company to exit this segment as well. The company emphasized that after-sales services will continue to be provided to existing customers.
Industry analysts expect the factory to maintain production under new ownership, with current employees retaining their positions following the joint venture dissolution.
Mitsubishi’s exit reflects broader challenges facing Japanese automakers in China’s rapidly evolving automotive landscape. The rise of domestic Chinese manufacturers like BYD and intensifying competition in EV development have created significant difficulties for Japanese companies in the market.
Other Japanese automakers have faced similar pressures. Nissan ceased production at its Jiangsu Province passenger car factory last year, while Honda closed its Guangdong facility and suspended operations at its Hubei plant, highlighting the widespread challenges confronting traditional automotive manufacturers in China’s transformation toward electric mobility.
The move underscores the strategic shift among international automakers as they adapt to China’s accelerating transition to electric vehicles and the competitive dominance of local manufacturers.
Source: Kyodo News, July 22, 2025
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