Mitsubishi Exits China After Three Decades

Automaker Cites Rapid Industry Shifts and Financial Strain

Mitsubishi Motors has officially ceased operations in China, marking the end of a nearly 30-year market presence that was once considered vital for the Japanese manufacturer’s expansion.

End of an Era

Production of vehicles by the joint venture with GAC halted in 2023, and the company has now concluded its long-standing engine production partnership with Shenyang Aerospace, which supplied engines for Mitsubishi and several Chinese domestic brands.

Factors Driving Departure

A combination of declining sales, fierce local competition, and substantial import duties significantly undermined Mitsubishi’s business model in the crucial Chinese market. The company pointed to the “rapid transformation” of China’s automotive sector.

This transformation sees traditional brands increasingly challenged by domestic manufacturers specializing in electric vehicle models. Mitsubishi began its Chinese car production journey in 2012 with GAC, seeing initial success with models like the Outlander, which once sold 144,000 units annually.

Financial Blows

The situation deteriorated this year, with Mitsubishi’s operational profit plummeting by as much as 84% in the first quarter. According to Nikkei Asia, import duties levied by the US cost the company approximately 14.4 billion yen (about 87 million euros), reducing its operating profit to just 5.6 billion yen (35.5 million euros).

China’s electric vehicle market is booming, with BYD surpassing Tesla in global EV sales in the fourth quarter of 2023, highlighting the shift in consumer preference and manufacturing prowess.

Looking Ahead

Mitsubishi’s withdrawal signifies a broader trend among some legacy automakers struggling to adapt to the accelerating pace of electrification and the competitive landscape dominated by agile local players in China.