Mitsubishi Motors has decided to stop making cars in China, which is a big change for the company.
They join other carmakers in leaving China, the world’s largest car market.
The company confirmed this decision on Tuesday, explaining that they would slowly stop making cars in China and leave a long partnership they had there.
They say they’re doing this because things in the car business are changing quickly in China.
“The shift to electric vehicles is accelerating faster than expected, and consumers are rapidly undergoing significant changes in their brand and segment choices,” Mitsubishi said.
This has made it hard for Mitsubishi to sell as many cars as they used to.
Over the last two to three years, Mitsubishi’s car sales in China have gone down.
“We tried to recover our sales volume by releasing a new model in December 2022, but we continued to fall short of our plan and have suspended our production since March of this year in order to adjust our inventory,” it said.
Now, Mitsubishi will give its part of the partnership in China to its partner, Guangzhou Automobile Group Company (GAC).
GAC will keep making electric cars at the same place where Mitsubishi used to make cars.
After this, GAC will be the only owner of this part of the business, which they started together in 2012.
Because of all these changes, Mitsubishi thinks they will lose about 24.3 billion yen, which is around $162.2 million, by March 2024.
They didn’t say if they would still sell cars from other countries in China.
This change for Mitsubishi happened shortly after Stellantis, the company that owns brands like Jeep and Chrysler also decided to leave China.
They agreed to sell things they used with their Chinese partner, Dongfeng Motor Group.
This means that Dongfeng will take over places in two Chinese cities that were used to make Peugeot and Citroën cars.
This deal is worth about 1.7 billion yuan, which is $232.5 million.
Stellantis started to make big changes in China in July 2022.
They wanted to stop working together with their Chinese partner and sell fewer cars there.
This was surprising because, before that, they wanted to own more of the business.
But they ran into problems, including political issues.
Later, in October 2022, this partnership had to declare that it couldn’t pay its debts.
Stellantis still sells cars from other countries in China.
Mitsubishi is planning to invest more money in other places.
They are helping a company called Ampere, which makes electric cars and is connected to a French carmaker called Renault.
Mitsubishi will give them up to €200 million, which is around $212 million, to help them sell more cars in Europe.