Mitsubishi Motors Corporation has denied rumors that it is planning to withdraw from the Chinese market amidst growing competition in the region. Speaking at a media briefing in Japan, the automaker's CEO, Takao Kato, stated that while the company is facing challenges in China, it has no plans to exit the market.
Kato's comments come after Mitsubishi's plant in Changsha, Hunan province suspended production in March and its Chinese joint venture partner, Guangzhou Automobile Group Co., did not list the production and sales numbers for Mitsubishi for the first time in April, sparking speculation that the two companies were severing ties. However, a representative from GAC claimed that the omission was due to Mitsubishi's production numbers making up a small portion of its total and being folded into the 'others' category.
Kato confirmed that Mitsubishi's Changsha plant will resume production in June, but acknowledged that the situation in China remains challenging. The company's Outlander model is struggling to sell in China, with local firms such as BYD Co., backed by Warren Buffett, dominating the market, while Japanese manufacturers continue to stagnate or decline.
Mitsubishi's retail sales in China fell to 32,000 units in Q3 and are expected to decline again for the quarter that ended in March. Kato stated that the company is working with its partners in China to determine the best way forward and is monitoring the situation closely.
"We're discussing with our partners in China on how to move forward," Kato said. "We're watching the situation closely."
Despite the challenges, Kato emphasized that no decisions have been made about leaving the Chinese market. "It has become clear we need a plan to overcome difficulties in China," he added.
Mitsubishi's struggles in China are part of a wider trend of Japanese automakers losing market share to local companies. The ongoing trade tensions between China and the US have also contributed to a slowdown in the Chinese auto market, with overall sales expected to decline in 2019 for the second consecutive year.