Mitsubishi Motors to set up joint venture in China

Mitsubishi Motors Corp. and trading house Mitsubishi Corp. said Monday they will set up a fifty-fifty joint venture in China to import and sell vehicles of the Japanese automaker.

Aiming to meet growing demand in China, the two companies said they plan to establish the new company, Mitsubishi Motor Sales (China) Co., in Shanghai in April 2009 with a capital of 3 billion yen, after obtaining approval from Chinese authorities.

In China, Mitsubishi Corp.'s local unit had been importing and selling Mitsubishi vehicles since 2005.

In line with shifting operations to the new company, the two companies said they will allocate more of their workforce to the joint venture to strengthen their marketing power and relationship with local dealers as well as improve after-sales services.

Mitsubishi Motors' sales in China have been rapidly expanding in recent years, reflecting the nation's fast-growing economy. In fiscal 2007, Mitsubishi Motors sold 11,537 vehicles in China, up 179 percent from a year earlier.

Although its sales have slowed somewhat this year, Mitsubishi Motors said the Chinese market for imported cars is expected to grow further.