Mitsubishi Motors has decided to withdraw from automobile production in China, reports Nikkei Asia. The company has started final withdrawal talks with China’s Guangzhou Automobile Group (GAC), a major automaker with which Mitsubishi has a joint venture. Mitsubishi’s sales in China have been sluggish due to the popularity of electric vehicles and the rise of local brands. Other Japanese automakers are also struggling and might review their strategies in the country.
GAC Mitsubishi Motors has a factory in Hunan province. The company halted production in March; it will not resume operations. The Hunan plant is Mitsubishi’s only factory in China.
GAC is expected to use the Hunan plant for EV production and try to maintain a certain level of employment. GAC has a 50% stake in GAC Mitsubishi, Mitsubishi Motors owns 30% and trading house Mitsubishi Corp. holds 20%. GAC Mitsubishi will remain as a corporate entity, but Mitsubishi Motors and Mitsubishi Corp. will withdraw their investments.