Mitsubishi expands in China but lacks new models

The Japanese automaker Mitsubishi Motors plans to accelerate its business in China, by launching a new 50/50 joint venture with Hunan Changfeng Group. The new venture is reported to focus on sedan production with an initial capability of 100,000 units annually, according to the local media.

Mitsubishi has two joint ventures in China--- South East Motor (SEM) and Hunan Changfeng Motor, a subsidiary company of Changfeng Group. Since the Shanghai Auto show, the overseas market manager has exposed that Mitsubishi plans to withdraw its 16.07 percent shares in Changfeng Motor and will turn to join hands with the parent company instead. Recently, Mitsubishi confirms the decision, but has not released any details.

Being granted Mitsubishi's sedan manufacturing technology for many years, SEM makes Mitsubishi's most popular sedan, Lancer. In addition, SEM's lineup also includes Space Wagon, Galant and Delica, Freeca, and other models of commercial vehicle. SEM is Mitsubishi's main driving force the Chinese market, but just like the other international players it would like to strengthen its position with another joint venture.

Changfeng uses Mitsubishi's technology to produce a sports utility vehicle (SUV) named Pajero and Liebao Feiteng. If the new joint venture comes to fruition, Mitsubishi might face the problem of not having enough models to hand over to the new joint venture with Hunan Changfeng Group.

According to documents released by the company, Mitsubishi is placing its hope on the Chinese market to turn its overseas business around. Compared to other Japanese carmakers like Toyota and Honda, with deep rooted presence in China and many best-selling models, Mitsubishi has to strengthen its business by introducing more products here, commented an industry watcher who insisted not to be named.