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A few days ago, GAC GROUP announced that according to the actual situation of some joint ventures and joint ventures, GAC GROUP and its wholly-owned subsidiary Guangzhou Automobile parts Co., Ltd. will provide financial support through entrusted loans and other means to promote the follow-up work of joint ventures and joint ventures or improve their operating cash flow.

The announcement shows that the joint ventures and joint ventures are some vehicle enterprises and spare parts supporting enterprises, including Guangzhou Auto Fick, Guangzhou Automobile Mitsubishi, Guangzhou Automobile Hino and Changsha Magna. GAC GROUP said that in order to promote the follow-up termination of GAC Fick in an orderly and stable manner, the company intends to provide it with funds of no more than 200 million yuan, specially for the payment of its staff placement expenses; at the same time, in order to properly alleviate the financial pressure of GAC-Mitsubishi, GAC Hino and Changsha Magna Automobile Decoration Co., Ltd., and promote the follow-up and stable development.

With regard to Guangzhou Auto Fick, it is now insolvent. GAC GROUP announced on the official website that Guangzhou Auto Fick has been losing money in recent years and has been unable to resume normal production and operation since February this year. GAC GROUP and joint venture partner Stellantis Group are negotiating to terminate the joint venture in an orderly manner and will properly handle matters related to the joint venture in accordance with the law. According to the data released by GAC GROUP, as of June 30, 2022, GAC Fick has total assets of 7.657 billion yuan, total liabilities of 8.186 billion yuan, asset-liability ratio of 107%, seriously insolvent.

At present, GAC Fick delisting is a foregone conclusion, but related matters are still under further negotiation, including the disposal of the factory. It is understood that Guangzhou Auto Fick has two major vehicle production bases, Changsha factory and Guangzhou factory, with an overall design capacity of 328000 vehicles, of which Changsha factory mainly produces free light, big commander, Guangzhou factory mainly produces free man and compass. In September 2021, Stellantis announced the closure of Guangzhou Auto Fick plant, which was taken over by GAC Ean and used to produce pure electric models. As for the Changsha factory, it is not clear what to do with it.

As one of GAC GROUP's joint venture brands, GAC Toyota and GAC Honda, which were established earlier, have always been responsible for sales, while GAC-Mitsubishi, as a latecomer, has a lower and lower sense of existence in the market. According to data released by GAC GROUP, as of June 30, 2022, GAC-Mitsubishi has total assets of 8.132 billion yuan, total liabilities of 6.574 billion yuan, asset-liability ratio of 81%, and is about to face the risk of insolvency.

Data show that GAC-Mitsubishi sold 43035 vehicles, 63199 vehicles, 56317 vehicles and 55888 vehicles respectively from 2013 to 2016. On September 24, 2016, GAC-Mitsubishi Outlander was officially listed in China. The appearance and interior design of domestic Olander was basically the same as that of the imported version, but some configurations were upgraded and current 2.0L and 2.4L engines were used. The listing of domestic Olander brought a brief highlight moment for GAC-Mitsubishi, with sales up 110.04% to 117388 vehicles in 2017 and 22.69% to 144018 vehicles in 2018. However, due to the single launch of the model, GAC-Mitsubishi, which is maintained only by the Outlander, has not opened up the situation. As a result, GAC-Mitsubishi successively introduced Yige, Jinxuan and other products to enrich the SUV product line, but even so, GAC-Mitsubishi's products are still too small compared with its competitors. Sales from 2019 to 2021 were 133016, 75001 and 66006 respectively, down 7.64%, 43.62% and 11.99% respectively from the same period last year. After entering 2022, the situation of GAC-Mitsubishi became even more dangerous, with sales of 20730 vehicles in the first eight months, down 46.81 per cent from a year earlier.

According to GAC GROUP's "14th five-year Plan" development rules, the whole vehicle plate adopts the development strategy of "two excellent, two specialties, one stable and one breakthrough", in which "two specialties" means to give full play to the technical advantages and brand influence of Jeep and Mitsubishi world-class professional SUV, focus on SUV products, and turn Guangzhou Auto Fick and Guangzhou Automobile Mitsubishi into professional brands with distinctive characteristics in the domestic automobile market. At present, it seems that GAC Fick is no different from delisting, while GAC Fick is still struggling, its lack of popular style products, the market performance is difficult to improve.

GAC-Mitsubishi itself is small, the product is single, and its own channel layout is also limited. In the face of the market after the impact of the epidemic, it did not seize the opportunity to rebound. At the same time, its product power and brand strength are between the first-line joint venture brand and the head independent brand, and the position is somewhat awkward in the current highly competitive market environment.

Looking back on the wasted years of Mitsubishi in China, Mitsubishi has been unable to establish a close and stable joint venture relationship in China, causing it to miss the development opportunity to cultivate the Chinese market. In 1995, Mitsubishi started cooperation with Changfeng to launch models in China in the form of technology transfer. In 2004, Mitsubishi partnered with BAIC to establish Beijing Mitsubishi, but sales were dismal. In 2006, Mitsubishi transferred to Fuqi, holding shares with Yulong and Fuqi, handing over the R & D, manufacturing, sales and after-sales business of imported Mitsubishi cars to Southeast Automobile. Southeast Motor has won the support of Mitsubishi vehicle manufacturing research and development, including Goran, Lancer, Yeshen, Junge, Fengdisi and other products, while Southeast Motor has independently developed Ling Shuai, Ling Gentry, Lingli and other models based on Mitsubishi Motors. Under the influence of products and word-of-mouth, Southeast Motor reached an all-time peak in 2013, with annual sales of 116000 vehicles.

However, Mitsubishi, which has only a 25 per cent stake, has repeatedly hoped to increase its stake in Southeast Motor. In 2010, after seeking to improve the stock ratio, Mitsubishi reached a partnership with GAC to set up GAC-Mitsubishi Automobile Co., Ltd. since then, Mitsubishi has not introduced new models to Southeast Mitsubishi, but has focused on GAC-Mitsubishi. After the establishment of the new joint venture, GAC-Mitsubishi will focus on the development of SUV, but only introduce Orande, Jinxuan and other models.

Japanese brands such as Honda and Toyota have successively established stable cooperative relations with two local automobile groups, making use of local resources to accelerate the development of the Chinese market, while Mitsubishi has been changing joint venture partners in China since the 1990s due to factors such as joint venture stock ratio. It was not until the cooperation with Guangzhou Automobile that it was temporarily stable, but it also missed many opportunities to dig deep into the Chinese market and continue to build brand influence.

As we all know, Mitsubishi is a member of the Nissan-Renault-Mitsubishi alliance, and these three brands are not doing well in the Chinese market. For example, Renault, its joint venture with Dongfeng Motor, announced its withdrawal from the market as early as April 2020, while Nissan, together with Dongfeng Motor, established Dongfeng Nissan passenger car Company, which covers three major brands Nissan / Qichen / Infiniti, and mainly sells from Nissan, while Nissan's best-selling models are only Xuanyi, Xiaoke and Teana, and Qijun, which once could still compete with RAV4 Rongfang and Honda CR-V. The loss of market due to the replacement of three-cylinder engines has affected the sales of Dongfeng Nissan and even Nissan in China.

As for Mitsubishi, its current situation is somewhere between Renault and Nissan, not to the point of delisting, but it has become a marginal brand, with most of its sales coming from Euroland. Take August sales as an example, Outlander Retail 1781 vehicles, including Yige, Jinxuan, Artuco and other models sales are less than 100. For GAC-Mitsubishi, which has been left far behind by the first-tier joint venture brand, to get a place in the current stock competition in China's auto market is not only a test of its own operating ability, but also a test of the choice of the parent companies of China and Japan.

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