- Mitsubishi fully exits China after engine JV ends and earlier GAC production halt.
- First-quarter profits plunged 84 percent amid weakening sales and tariff penalties.
- Tariffs cost Mitsubishi 14.4 billion yen, slashing its operating earnings significantly.
A difficult start to 2025 has put Mitsubishi under renewed pressure, as the company reports a sharp drop in profits and makes the significant decision to leave the Chinese market altogether. After ceasing vehicle production in China in 2023, Mitsubishi now confirms a full withdrawal, ending decades of business in a country where domestic automakers have rapidly pulled ahead, especially as demand for new-energy vehicles continues to climb.
Read: Struggling Mitsubishi Chased Out Of China By Local Brands
Earlier this month, Mitsubishi announced it had terminated its joint venture agreement with Shenyang Aerospace Mit. Engine. Mfg. Ltd, which had been responsible for building engines for Mitsubishi-branded models as well as for several Chinese brands. This joint venture has been operating since 1998, but has now been renamed following Mitsubishi’s exit.
According to the Japanese brand, it’s completely exited the nation because of the “rapid transformation” of its automotive industry.
A Decade of Production, Then a Sudden Shift
Mitsubishi began producing cars in China through a partnership with GAC in 2012. At its peak, the collaboration saw annual sales hit 144,000 units, with the Outlander standing out as a popular model. But by 2023, Mitsubishi had already withdrawn from the GAC joint venture, signaling that the end of its China strategy was near.
Tariffs Hurt Profits
Confirmation of Mitsubishi’s exit from China comes just after it reported an 84 percent year-on-year decline in its first-quarter operating profit. Tariffs enforced by President Donald Trump hurt the automaker to the tune of 14.4 billion yen (~$97 million), causing its quarterly operating profit to slip to just 5.6 billion yen or $35.5 million, Nikkei Asia reports.
Mitsubishi’s most important market remains Southeast Asia, but even there, its sales slipped 8.5 percent to 54,000 vehicles in the first quarter. North America accounted for 22 percent of total sales, and interestingly, North American sales rose 5 percent from the previous year. However, this wasn’t because of the US, but rather increased demand in Mexico and Canada.
The United States and Japan recently agreed to a new trade deal to drop tariffs from 25 percent to 15 percent. While this should help Mitsubishi, it has not yet adjusted its earnings forecast for the fiscal year ending March 2026.
