(Yicai Global) July 13 -- The Chinese joint venture between Japanese carmaker Mitsubishi Motors and China’s GAC Group has suspended production and started personnel adjustments because of low sales and difficulties to follow the rapid changes toward electrification.
GAC Mitsubishi Motors’ management and shareholders have made great efforts over the past months, but the automobile market is undergoing a rapid transition from fuel-powered cars to new energy vehicles, so the firm must follow the trend and grasp new opportunities, the JV said in an open letter to employees, Yicai Global learned.
A working group from GAC’s NEV brand GAC Aion joined GAC Mitsubishi’s team to help it rebuild its production lines into GAC Aion’s third plant, media reported earlier. Some GAC Mitsubishi employees will join GAC Aion after a round of layoffs at the JV, the report added.
GAC Mitsubishi never commented on the report.
Founded in 2012, GAC Mitsubishi experienced peak sales in 2018, with 144,000 units. Sales fell to 33,600 units last year. In the first five months, the JV sold 8,943 vehicles, down over 25 percent from a year earlier.
GAC Mitsubishi logged nearly CNY2 billion (USD279.1 million) in net loss last year, and its debt-to-assets ratio climbed to 98.3 percent by last December.
Editor: Futura Costaglione