(Yicai) July 24 -- Japanese carmaker Mitsubishi Motors has exited its last joint venture in China, which it co-owned with Chinese auto giant GAC Group.

Mitsubishi Motors terminated its engine business operation at Shenyang Aerospace Mitsubishi Motors Engine Manufacturing in China and the JV partnership, the Tokyo-based company announced on July 22.

Established in 1997, SAME began engine production the following year. Since then, it has played a key role in China's automotive market expansion by supplying engines to Mitsubishi-branded vehicle manufacturers and numerous Chinese automakers.

"In response to the rapid transformation of China's automotive industry, Mitsubishi Motors has reassessed its strategy in the region and has decided to terminate its participation in the JV," the firm added.

After the announcement, Yicai contacted Mitsubishi Motors' Chinese subsidiary to ask whether it plans to fully exit China. However, Mitsubishi Motors China declined to answer.

Mitsubishi Motors launched operations in China in the 1970s, actively participating in China's automotive localization process with its engine and parts businesses. Nearly one-third of Chinese new cars were once equipped with Mitsubishi engines, including those from BYD, Geely Automobile, and Great Wall Motors.

The company established several vehicle manufacturing JVs in China, but eventually exited all of them. The previous manufacturing JV Mitsubishi Motors exited was GAC Mitsubishi Motors in October 2023 after about 11 years of operations. 

Mitsubishi Motors' exit from its engine and vehicle manufacturing ventures in China after more than 50 years of operations reflects its internal strategic adjustments and the competitive pressure and challenges Japanese brands face in China, according to industry analysts.

Japanese automaking JVs’ share in the Chinese market shrank to 12 percent in June from 14.3 percent a year earlier, according to data from the China Passenger Car Association.

Whether Japanese carmakers can achieve a turnaround through electrification transformation and partnerships with local technology companies remains to be seen, the analysts noted.

Editor: Futura Costaglione