TOKYO -- Mitsubishi Motors Corp. will buy a 25 percent stake in a Chinese carmaker that has been building vehicles based on Mitsubishi designs for years.
Mitsubishi's turnaround plan calls for it to make substantially more profits in Asia, centered on China, than in the United States. Taking greater control of companies that assemble its vehicles in China is a key part of that plan.
Until now, Mitsubishi's stake in South East (Fujian) Motor Corp. has been indirect. Mitsubishi owns 14 percent of China Motor Corp., of Taiwan, which in turn owns half of South East (Fujian).
Mitsubishi will spend ¥8.75 billion, or $74.1 million at current exchange rates, to buy 25 percent of South East (Fujian). Subject to government approvals, the deal will leave the Chinese carmaker owned 50 percent by Fujian Motor Industrial Corp., 25 percent by Mitsubishi and 25 percent by China Motor.
South East (Fujian), located almost directly across the strait from Taiwan, builds the Mitsubishi Lancer-based Lioncel sedan, the Soveran compact minivan, and the Freeca and Delica vans. All are sold under the South East brand, not the Mitsubishi brand. The carmaker has capacity to build 150,000 vehicles a year. Sales in 2005 were approximately 60,000.
Mitsubishi aims to begin building Mitsubishi-badged cars as soon as possible. The only Mitsubishi-badged vehicles now built in China are the Pajero Sport and Outlander SUVs, which are assembled at Beijing Benz-DaimlerChrysler Automotive Co. That company absorbed the operations of the former Beijing Jeep Corp.
You may e-mail James B. Treece at [email protected]