Mitsubishi Motors Discontinues Final Chinese Venture

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(Digital Phablet) July 24 — Japanese automaker Mitsubishi Motors has officially exited its final joint venture in China, which it co-owned with the Chinese automotive giant GAC Group.

The company announced on July 22 that it has ceased operations of its engine manufacturing plant at Shenyang Aerospace Mitsubishi Motors Engine Manufacturing in China, marking the end of their partnership in that region.

Founded in 1997, SAME began producing engines the following year. Over the years, it has played a vital role in expanding China’s automotive industry by supplying engines to Mitsubishi-branded vehicles and numerous Chinese automakers.

“In response to the rapid changes in China’s automotive sector, Mitsubishi Motors has reevaluated its regional strategy and has made the decision to withdraw from its joint venture,” the company stated.

Following this announcement, Digital Phablet reached out to Mitsubishi Motors’ Chinese subsidiary for clarification on whether the company intends to fully withdraw from the Chinese market. However, no response was provided.

Mitsubishi Motors entered China in the 1970s, actively contributing to the country’s automotive localization efforts through its engine and parts divisions. At one point, nearly one-third of new cars in China were fitted with Mitsubishi engines, including vehicles from BYD, Geely, and Great Wall Motors.

The company established multiple vehicle manufacturing joint ventures in China over the years but has since exited all of them. The latest manufacturing partnership, GAC Mitsubishi Motors, ended in October 2023 after approximately 11 years of operation.

Industry analysts suggest that Mitsubishi Motors’ departure from both engine and vehicle manufacturing in China after more than five decades reflects strategic adjustments within the company, alongside increasing competitive pressures faced by Japanese brands in the Chinese market.

According to data from the China Passenger Car Association, the market share held by Japanese automaker joint ventures in China shrank to 12% in June, down from 14.3% a year earlier.

It remains to be seen whether Japanese automakers can turn things around with electrification initiatives and collaborations with local tech firms, analysts noted.