On the evening of October 24th, GAC Group announced that the board of directors had approved the “Announcement on Related Transactions related to the Restructuring of GAC-Mitsubishi”, proposing to implement equity adjustments and other restructuring matters for GAC-Mitsubishi and GAC Mitsubishi Automobile Sales Company. GAC Group will acquire 30% and 20% of the equity held by Mitsubishi Automotive Industry Co., Ltd. and Mitsubishi Corporation for a consideration of 1 yuan, and GAC-Mitsubishi will become a wholly-owned subsidiary of GAC.
After the restructuring is completed, GAC AION will utilize the GAC-Mitsubishi factory to achieve increased production and capacity expansion, with plans to achieve mass production by June 2024. GAC Mitsubishi Automobile Sales Company will be jointly owned by GAC Group, Mitsubishi Motors, and Mitsubishi Corporation, and will continue to provide spare parts and after-sales services to GAC-Mitsubishi car owners. GAC Group stated that this restructuring effectively avoided the dissolution and liquidation of GAC-Mitsubishi, and made every effort to protect consumer rights and assist employees in re employment.
Data shows that as of March 31 of this year, GAC-Mitsubishi’s audited total assets were 4.198 billion yuan, total liabilities were 5.613 billion yuan, and net assets were -1,414 billion yuan.
On the same day, the official website of Mitsubishi Motors also released a notice on changes in the business structure in China. Mitsubishi Motors stated that in the past 2-3 years, the Chinese automotive industry has faced sharp market changes, and the transition to electric vehicles has been faster than expected. The company plans to put in new vehicles and other products to recover sales in December 2022, but the plan did not meet the standards. Starting from March this year, in order to adjust inventory, the factory has stopped operating. Based on this, the company has conducted a thorough re-examination of China’s strategy and terminated the localized production of Chinese Mitsubishi brand vehicles.
As one of the earliest Japanese maker to enter the Chinese market, Mitsubishi Motors has been in China for 50 years so far. As early as 1973, Mitsubishi sold medium-sized trucks in China and subsequently established joint ventures in the Chinese market. In 2003, Mitsubishi Motors sold over 140,000 units annually in China, becoming a mainstream joint venture brand.
After the establishment of GAC Mitsubishi in 2012, it had multiple models under its umbrella, including the Eclipse Cross, Outlander, Qizhi (a plug-in hybrid model under GAC-Mitsubishi with GAC badge), ASX (RVR in the Japanese market), and Pajero. However, compared to other brands, the update speed of the models was slower and could not keep up with the rapid development of the Chinese market. Since 2018, GAC-Mitsubishi has only three remaining fuel powered vehicles, the ASX, Outlander, and Eclipse Cross, in production and sales, facing numerous difficulties in the transformation of new energy.
By 2022, Only the Outlander is left for GAC Mitsubishi fuel vehicles, and this model was also the main sales force of GAC-Mitsubishi. In 2018, the Outlander sold 105,621 vehicles per year, almost supporting the annual sales of GAC-Mitsubishi. The reliance on a single model is very obvious. In the first half of 2023, GAC Mitsubishi’s cumulative sales were 12,000 vehicles, although new energy vehicles were launched, sales did not show much improvement.