Mitsubishi Motors Exits China After Joint-Venture Termination

Mitsubishi Motors has terminated its joint venture with China’s Shenyang Aerospace, leading to its exit from the Chinese market.

Mitsubishi Motors Corporation (MMC) announced the termination of its joint venture agreement with China’s Shenyang Aerospace, marking the Japanese automaker’s complete withdrawal from the Chinese automotive manufacturing sector. According to its official statement, this partnership dissolution is due to “the rapid transformation of China’s automotive industry,” plus the market’s surge demand for new energy vehicles (NEVs).

This partnership saw the establishment of Shenyang Aerospace Mitsubishi Motors Engine Manufacturing Co., Ltd. (SAME) back in 1997, with the entity that had been a cornerstone of Mitsubishi’s China strategy in charge of producing engines for both Mitsubishi-branded vehicles and numerous other Chinese automakers.

The joint venture began its production operations back in 1998, where they supplied critical powertrain components to support Mitsubishi’s local assembly lines and third-party manufacturers. Now with Mitsubishi Motors out of the picture, SAME was officially renamed to Shenyang Guoqing Power Technology Co., Ltd.

Mitsubishi’s journey in the Chinese automotive scene dates way back to 1973, when the automaker previously exported its medium-sized trucks into China. By the early 2000s, its two-engine joint ventures supplied powertrains for approximately 30% of domestically produced vehicles, before the rise of China’s new energy sector, coupled with the slower demands for ICE powertrains, eroded its market position.

Besides SAME, Mitsubishi’s involvement in the Chinese automobile industry also saw the automaker forming GAC Mitsubishi back in 2012—a 50:30:20 joint venture with Guangzhou Automobile Group (GAC) and Mitsubishi Corporation. The joint venture showed some promise in early days, with its sales peaking at 144,000 units in 2018, driven by the popular Outlander SUV. 

However, its annual deliveries had plummeted to just 33,600 units by 2022, while its net worth reportedly declined to the negatives as of 2023, thus leading to the halt of its local production and the restructuring of its China operations. By 2024, GAC subsequently took full ownership of the joint venture, where the production facilities had been repurposed for its then-new EV brand, Aion.

On a grander scale, Mitsubishi's exit from the Chinese automotive space is just yet another example of challenges faced by foreign automakers in China. Besides Mitsubishi, other foreign joint ventures like GAC-FCA have also collapsed entirely, giving way to the growing dominance of China’s domestic automakers and their resilience push for NEVs.

Source: CarNewsChina