Mitsubishi Motors recently denied the widespread rumor that it will withdraw from the 14.6 percent stake it holds in Chinese automaker GAC Changfeng Motor. Instead, Mitsubishi Motors is considering expanding its cooperation with GAC Changfeng Motor as one of the major steps to rejuvenate its China business, according to the Japanese automaker.
Prior to that, Osamu Masuko, president of Mitsubishi Motors, pointed out at the 2010 Beijing International Automotive Exhibition, that establishing a 50-50 joint venture in China has become Mitsubishi Motors’ primary goal, with its relationship with GAC Changfeng Motor becoming a focus point.
The strategy of establishing a 50-50 joint venture there was a result of fierce competition in the Chinese auto market and its rivals’ rapid growth in that market. Masuko attributed its disadvantages against rivals to the lack of such a joint venture in China.
A market strategy change for China, the world’s largest auto market, is a new challenge that Mitsubishi Motors has to face given its failure to forge a partnership with Peugeot Citroen and its stagnation or declines in developed markets.
Though Mitsubishi Motors returned to profitability in 2009, it saw a year-on-year decline of 10 percent in global sales volume during the year. However, its sales volume in Asia’s emerging markets rose five percent in 2009 compared to the same period of the prior year. In China, the Japanese carmaker sold 125,000 new cars during 2009, up more than 50 percent from a year earlier.
