Japanese automaker Mitsubishi Motors announced plans to abandon its long-standing joint venture with Guangzhou Automobile Group (GAC) in the world’s largest auto market, China.
The move is part of the company’s strategy to focus its efforts and resources on its planned investment in Renault’s electric vehicle business unit.
Plan details
According to Reuters, Mitsubishi founded its local joint venture with GAC and trading house Mitsubishi Corp. way back in 2012.
Now, the Japanese automaker aims to transfer all its shares in the JV to GAC. In effect, the Chinese company will have full ownership of the business unit.
GAC Aion models will undergo production at the JV’s Hunan factory starting in June 2024. GAC reportedly stated that this additional production would boost its capacity to achieve its annual target of 600,000 units by the same year.
It is worth noting that Mitsubishi had only produced gasoline cars under the JV. Now, it aims to advance its electrification with Renault.
Investment
The Japanese automaker confirmed plans on Tuesday to allocate a maximum amount of 200 million euros ($214 million) in Renault’s Ampere.
The investment is crucial for the company’s efforts to solidify its presence in the European auto industry and beyond.
Mitsubishi clarified its intentions to advance its electric vehicle development technology through the planned investment in the French brand.
For context, Renault is planning to list Ampere on the stock market through an Initial Public Offering as early as next year. According to Bloomberg, the French automaker targets a market valuation of $10 billion for its EV business unit.
“As a first step of this collaboration, Ampere will supply an EV on an OEM (original equipment manufacturer) basis in the European market.”
Mitsubishi
Renault Chairman Jean-Dominique Senard aims to have further discussions with the Japanese automaker during his planned visit to the Asian country, Channel News Asia indicated.
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Mitsubishi’s decision to invest in Ampere occurred following Nissan’s recent announcement to commit 600 million euros ($640.98 million) to Renault’s EV unit. The move is unsurprising, considering Mitsubishi’s weak position in the Chinese market, like most Japanese brands. According to The Japan Times, its China-made vehicle sales declined 47.6% YoY to just 12,497 units so far this year.
