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Mitsubishi withdraws from China? Official response

2024-04-22 Update From: AutoBeta autobeta NAV: AutoBeta > News >


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Japan's Mitsubishi Motors has decided to stop producing cars in China and has begun final negotiations with GAC Group on the issue, Japan Economic News reported Thursday. Reported that GAC Mitsubishi joint venture will retain, but Mitsubishi is expected to withdraw investment, Hunan Changsha plant will be used as GAC Group's pure electric vehicle production base, will minimize the impact on employment.


In response to the "Nihon Keizai Shimbun" revelations, Mitsubishi public relations department head Toruji Inoue said that the report is not officially released by the company,"still continue to talk to shareholders, has not made any decision."

Whether Mitsubishi Motors will stop producing cars in China has not yet been finalized, but Mitsubishi Motors 'failure in the Chinese market has long been doomed. Its products are single and lack competitiveness, its electric transformation is slow and the influence of Chinese local automobile enterprises is increasingly strong. In the view of "Auto Industry Concern," Mitsubishi Motors may withdraw from China only a matter of time.

As early as March 20, the auto media person "Wu Pei" posted a message on the social platform that a Japanese joint venture brand was about to withdraw from the Chinese market, and the production line capacity would be transferred to the same group's independent brand OEM. At that time, GAC Mitsubishi was considered "most likely" to withdraw from China's Japanese joint venture brand, and the official response was "GAC Mitsubishi is operating normally, Mitsubishi has not withdrawn, and the factory is also operating normally."


A month later, GAC Mitsubishi "disappeared" from the production and sales express of GAC Group, and the sales data was not disclosed by the official of the Group. The official response was that "the sales volume is too low to be listed separately."


On July 12, GAC Mitsubishi issued a Letter to All Employees of GAC Mitsubishi. GAC Mitsubishi said in an internal letter that the company officially entered the temporary shutdown stage in June, and optimized the personnel structure according to the actual situation, and made every effort to protect the legitimate rights and interests of employees according to laws and regulations. In the above-mentioned open letter, GAC Mitsubishi did not indicate that it would withdraw from China, but also admitted that "the current products are affected by market transformation, sales do not meet expectations, and operations are in trouble". Since then, Mitsubishi Motors CEO Takao Kato has said structural reforms are necessary for the depressed sales of its business in China.


Founded in 2012, GAC Mitsubishi didn't make much splash in the early stage. It wasn't until 2016 that domestic Outlander ushered in sales breakthrough. In 2018, GAC Mitsubishi sold 144,000 vehicles in the whole year, which is the peak moment since Mitsubishi entered the Chinese market. Since then, with the intensification of competition in the domestic automobile market, the slow iteration of Mitsubishi Automobile products and the decline of brand influence, Mitsubishi Automobile's presence in the Chinese market has been declining day by day, and its market share has continued to decline. In 2022, GAC Mitsubishi sold 33,600 vehicles annually, which was the "bottom" in GAC Group and became the joint venture brand with the largest decline.


Since 2022, GAC Mitsubishi has only put into production two new models, Atuke and Outlander, among which Atuke is the first pure electric SUV of GAC Mitsubishi. This model is replaced by GAC AION V model. The comprehensive range is 520km, and the price starts from 199,800 yuan. The higher market price and far lower product power at the same level make the sales volume of this model continue to be depressed. As for Outlander, it is GAC Mitsubishi's best-selling model, and slow product update iteration makes it lose its competitive advantage.

If there is a unique technology, there may be consumers willing to buy it, but Mitsubishi, which once made its own brand look behind, technology has become a big weakness. In the era when independent brands could not develop their own engines, Mitsubishi engines became the best choice for many independent brands by virtue of their advantages of solid durability and convenient maintenance. BYD, Great Wall and Geely had used Mitsubishi engines. However, when turbocharged engines became the mainstream of the market, Mitsubishi still used naturally aspirated engines. When the shortcomings such as high fuel consumption and weak power were highlighted, Mitsubishi engines gradually became representatives of no progress and were gradually abandoned by the market.


GAC Mitsubishi is not the only joint-venture brand in trouble. In fact, since 2023, even the once-hot Toyota, Honda and Nissan have become more and more difficult. Nissan China sales plunged 24.4 percent in the first half, Honda China slumped 22.0 percent and Toyota China slid 2.8 percent, official data showed.

The North and South Volkswagen, which has dominated China's auto market for many years, is not what it used to be. In 2022, BYD sold more than FAW-Volkswagen to become the top passenger car manufacturer, ending the history of more than 20 years of joint venture brand domination in China's auto market. In the first half of 2023, FAW-Volkswagen was overtaken by BYD again, with sales of the former falling 2.8% to 838,700 units and the latter increasing 80.8% year-on-year to 1,154,600 units. SAIC Volkswagen of the same door is even more dismal, with sales of 532,500 vehicles in half a year, overtaken by Geely Automobile and Chang 'an Automobile.


Since 2018, Chang 'an Suzuki, Chang' an PSA, Dongfeng Renault, GAC Acura, GAC Fick and other joint venture brands have withdrawn from the market for six consecutive years, while Shenlong Automobile, Yueda Kia, Beijing Hyundai, Chang 'an Ford and other joint venture brands are also in a worrying situation, constantly seeking opportunities to "survive" through measures such as cost reduction and efficiency increase, and selling factories.

In fact, it is not so important whether Mitsubishi will withdraw from China. Just like Nokia abandoned by the times, GAC Mitsubishi will not be the last one under the background of collective decline of joint venture brands.

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