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It's history! GAC-Mitsubishi completed restructuring, Mitsubishi withdrew

2024-07-14 Update From: AutoBeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)03/03 Report--

According to the national enterprise credit information publicity system, the industrial and commercial change has taken place in GAC-Mitsubishi Automobile Co., Ltd., and the enterprise name has been changed to Hunan Zhiheng Automobile Management Co., Ltd. at the same time, Mitsubishi Automotive Industry Co., Ltd., Mitsubishi Commercial Co., Ltd. withdrew from the ranks of shareholders, and the company added new energy vehicle sales, parking services and so on. Data show that GAC-Mitsubishi was founded in May 2012, the legal representative is Jiang Xiuyun, the registered capital is 1.947 billion yuan, is now wholly owned by GAC GROUP.

GAC GROUP issued a notice on October 24, 2023, saying that the board of directors approved the announcement of related party transactions on the restructuring of GAC-Mitsubishi, and proposed to implement restructuring matters such as equity adjustment of GAC-Mitsubishi Automobile Co., Ltd., and GAC-Mitsubishi Automobile sales Company. The announcement shows that GAC GROUP will transfer 30% and 20% of GAC-Mitsubishi held by Mitsubishi Automotive Industry Co., Ltd. and Mitsubishi Commercial Co., Ltd. at a consideration of 1 yuan, and the local production of Mitsubishi-branded cars in China will be terminated. GAC-Mitsubishi will become a wholly-owned subsidiary of GAC GROUP, and GAC Ean will use GAC-Mitsubishi factory to increase production and expand capacity.

Mitsubishi Motors has announced that it will end its domestic production and its Hunan plant will be taken over by GAC Ean, which also means that Mitsubishi Motors will officially withdraw from China. For matters related to withdrawal, GAC-Mitsubishi has also made proper arrangements: first, to provide generous compensation for employees who are about to lose their jobs, and to make sure that GAC Ean can provide job arrangements after taking over; second, for car owners, the official website says it will, as always, provide after-sales service support such as vehicle maintenance, parts supply and quality warranty. Third, the existing cars in stock will be sold at a 60% discount until the inventory is exhausted.

GAC-Mitsubishi was established by GAC GROUP, Mitsubishi Industrial Association and Mitsubishi Commercial Association at 5:3:2 in May 2012 and has been cooperating for 30 years. After confirming a "romantic relationship" with GAC GROUP, GAC-Mitsubishi successively launched dazzling ASX, Pajero and Pajero Jinchang models, but sales were mediocre, and sales did not improve until the introduction of the third-generation Outlander into China in 2016. In 2018, GAC-Mitsubishi sold 144000 vehicles a year, the highest since Mitsubishi entered China.

While GAC-Mitsubishi creates a sales peak, there is also a hidden crisis. GAC-Mitsubishi relies heavily on Olander models, accounting for 73% of GAC-Mitsubishi's total sales in 2018. In order to reduce its dependence on a single model, GAC-Mitsubishi launched the Yige model in November 2018 and positioned it as Mitsubishi's first global strategic model in the new century. Since then, with the improvement of the penetration of new energy vehicles, GAC-Mitsubishi launched 2020 Qizhi EV, 2020 Pajero and Xin Jinxuan three products in 2020, but these models also did not cause too much splash in the market. At the same time, GAC-Mitsubishi is increasingly dependent on Olander models, up to 90%, while the iterative mistakes of Olander and the decline of Mitsubishi brand influence have led to a declining sense of existence of Mitsubishi-branded cars in the Chinese market. In 2022, GAC-Mitsubishi sold 33600 vehicles annually, ranking "at the bottom" in GAC GROUP, becoming the joint venture brand with the biggest decline.

GAC GROUP, as a joint venture party, is also responsible for the poor development of GAC-Mitsubishi. Prior to GAC-Mitsubishi, GAC GROUP successively established joint ventures with Toyota and Honda to develop business. The performance of these two joint ventures in the Chinese market is far better than that of GAC-Mitsubishi. GAC GROUP still enjoys the development dividend brought by these two joint venture brands. At the same time, before the establishment of GAC-Mitsubishi, GAC GROUP launched Chuanqi brand and invested a lot of resources to develop its own brand business. Later, in the era of new energy vehicles, GAC GROUP launched the Ian brand, and now it is also the leading brand in the independent new energy market, with rapid development momentum and the source of GAC GROUP's sales growth. Overall, GAC-Mitsubishi is not as good as Guangzhou Auto-Honda and Guangzhou Auto-Toyota, resulting in a tilt of resources, while GAC GROUP focuses more on developing its own car brand business and new energy vehicle business, and has no time to take care of GAC-Mitsubishi.

Of course, the main responsibility lies with Mitsubishi Motors. First of all, Mitsubishi Motors focuses on the development of SUV while developing cars, while over-relying on Orlande, while Olander's iteration directly makes Mitsubishi Motors into trouble and loses the opportunity to compete with CR-V and RAV4. Second, Mitsubishi Motors did not seize the opportunity for the development of new energy vehicles in the Chinese market and missed the opportunity for the development of new energy vehicles. GAC-Mitsubishi does not have its own electric vehicle platform. In order to launch the first pure electric SUV Artuco, it has to use the pure electric platform of the Ian brand, but this electric car sells only three figures a month. Finally, Mitsubishi Motors, as an established manufacturer, is also gradually abandoned by the market, old-fashioned design and technology can not compete with Chinese brands.

From the perspective of GAC-Mitsubishi delisting, China's auto market has moved from a joint venture era in the past to a more diversified era. The rise of Chinese auto brands, especially new energy vehicles, is bound to intensify market competition. Those uncompetitive joint venture car brands will only accelerate their exit. Today, GAC-Mitsubishi has changed its name to Hunan Zhiheng Automobile, and its imprint in the Chinese market is slowly being removed, and GAC-Mitsubishi will not be the last joint venture brand to withdraw from the Chinese market.

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