AutoBeta(AutoBeta.net)10/06 Report--

On October 5, according to media reports, Japan's Mitsubishi Motors decided to stop producing cars in China. At the same time, the report also revealed that Japan's Mitsubishi Motors hopes to withdraw its investment in the local joint venture with GAC GROUP, but the joint venture with GAC GROUP may be retained. In terms of factories, GAC-Mitsubishi has only one factory in China, which is located in Changsha, Hunan Province. it may be changed into a pure electric vehicle production base by GAC GROUP. Reported that Japan's Mitsubishi is still in final negotiations with GAC GROUP.

In fact, there has been frequent news that Mitsubishi Motors has stopped production in China in recent months. On Sept. 27, several Japanese media reported that Mitsubishi Motors had decided to stop car production in China because of poor sales. At that time, the head of Mitsubishi's public relations department responded to the news that the report was not officially released by the company and was still in dialogue with shareholders without making any decision. In March, it was revealed that GAC-Mitsubishi had stopped production at its factory in Changsha, Hunan province, because of weak sales of Orange models. In May, GAC GROUP released April production and sales figures, but did not see GAC-Mitsubishi sales from GAC GROUP and KuaiBao, which also sparked a heated discussion among netizens at that time, and the official later responded that GAC-Mitsubishi data was merged into "other items". Sales are low enough to be listed separately.

Various signs have also made many netizens suspect that GAC-Mitsubishi may withdraw from the Chinese market. However, in May, Mitsubishi President Takao Kato said: "Mitsubishi has no plans to withdraw from the Chinese market, and despite the difficulties faced by the company in China, the Changsha plant will resume production in June as planned." On June 21, GAC GROUP disclosed a notice on providing entrusted loans to GAC-Mitsubishi. According to the announcement, the company's board of directors passed a resolution agreeing that Dongfang shares of the joint venture GAC-Mitsubishi should provide financial support of no more than 1.884 billion yuan to GAC-Mitsubishi according to their respective shareholding ratio. In fact, as early as September 2022, GAC GROUP also provided GAC-Mitsubishi with a loan of 1 billion yuan for blood transfusion, but it did not improve the financial situation of GAC-Mitsubishi at that time. Relevant data show that GAC-Mitsubishi lost nearly 2 billion yuan in 2022 and its asset-liability ratio reached 98.33% at the end of last year.

Although officials have denied that they will withdraw from the Chinese market, production will resume in June. But on July 12, GAC-Mitsubishi officials issued a "letter to all employees of GAC-Mitsubishi". According to the letter, due to the impact of market transformation, sales did not meet expectations and the operation was in difficulty. The company will officially enter the temporary shutdown stage in June, at the same time optimize the personnel structure according to the actual situation, and try our best to protect the legitimate rights and interests of employees in accordance with the law. However, in the letter, GAC-Mitsubishi did not mention that it would withdraw from the Chinese market, but judging from its market performance, its sales in the Chinese market are not optimistic.

Relevant data show that GAC-Mitsubishi is a Sino-foreign joint venture jointly operated by Guangzhou Automobile Group Co., Ltd., Guangzhou Automobile Group Co., Ltd., and Mitsubishi Automotive Industry Co., Ltd., which was established in 2012. The shares of the three companies are 50%, 30% and 20%. GAC-Mitsubishi product line is mainly concentrated in the SUV market, its models are Orlande, Pajero Jinchang, new Jinxuan, Yige and other models.

In 2016, GAC-Mitsubishi launched the Outlander model, and the new car was favored by the market as soon as it was launched. GAC-Mitsubishi sold 117388 vehicles in 2017, up 110.04% from a year earlier. Olander sales peaked in 2018, with 105621 vehicles sold in the year, while GAC-Mitsubishi sold 144018 vehicles in the same year, up 22.69% from a year earlier. However, the good times will not last long, because of the single product, its own channel layout, lack of product capacity and other factors, since 2019, GAC-Mitsubishi has gone downhill. From 2019 to 2022, GAC-Mitsubishi sold 133016 vehicles, 75001 vehicles, 66006 vehicles and 29112 vehicles respectively. Although GAC-Mitsubishi has also made adjustments, successively launched new Outlander, Yige, Jinxuan and other products, but the increase in the number of models has not improved the sales of GAC-Mitsubishi.

Of course, the decline in GAC-Mitsubishi sales has something to do with the weak competition of its products. On the other hand, at this stage, the new energy vehicle market has become more and more fierce. GAC-Mitsubishi is slow in the electrified transformation. So far, it has only launched a pure electric model, the Artuco. Its sales on the market last year were also lower than expected, with annual sales of only 631 vehicles. With the lag of GAC-Mitsubishi sales in China and the slow transformation of electrification, Mitsubishi Motors' market position in China is also gradually being marginalized, and it may be a high probability event to withdraw from the Chinese market.

Returning to the factory, it has yet to be officially announced whether the GAC-Mitsubishi plant will be taken over by Ean. However, as early as May, there were market rumors that Eian's project team had been officially stationed in GAC-Mitsubishi, the third plant of GAC-Ean, code-named "ACS Project", had been officially launched, and the GAC-Mitsubishi Changsha plant would be upgraded to GAC-Mitsubishi's third plant. Industry insiders pointed out that Ean plans to achieve production and sales of one million vehicles by 2025. If GAC-Mitsubishi becomes its third plant, this will not only absorb GAC GROUP's excess fuel vehicle capacity, but also enhance its R & D capacity on the basis of a rapid increase in production capacity.

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