Emergency break
February 6, 2012
Mitsubishi Motors confirmed on Monday it would completely wind down car production in Europe by the end of this year. It would make it the first major Japanese carmaker to abandon its European operations.
The company runs a subsidiary in the Netherlands called Netherlands Car BV (NedCar). It puts out Colt subcompact and Outlander sports utility vehicles for the European market.
But Mitsubishi says it's lost confidence in that market.
"Mitsubishi has concluded it is not viable to allocate a new production model at NedCar," the carmaker said in a statement in Tokyo.
Output from the Dutch plant has remained sharply below a capacity of 200,000 units per year. In the last fiscal year, only 50,000 cars were produced there, contributing to Mitsubishi's 11.4 billion yen ($148.5 million) operating loss in Europe in the April through December period.
Dwindling demand
The company said unfavorable business conditions had led to stagnant sales on the continent, which is struggling with a raging debt crisis. But Mitsubishi insisted Europe remained an important market and that it would continue sales to the continent by supplying cars assembled in either Japan or Thailand.
Mitsubishi said it would shift its production focus to rapidly industrializing nations such as China and Russia, where demand was expected to grow considerably over the next few years.
"As for NedCar, we are considering various options such as seeking a third party to maintain the facility [in the Netherlands]," Mitsubishi said in its statement.
The Japanese carmaker opened its Dutch production facility in 1991.
It started as a joint venture with Sweden's Volvo, but Mitsubishi bought out Volvo ten years later.
Author: Hardy Graupner (AFP, dpa)
Editor: Zulfikar Abbany