Mitsubishi Motors Faces Sales Slump in China amid Shift to Electric Vehicles
Mitsubishi Motors finds itself entangled in the daunting complexities of lackluster sales amid a rapidly transforming automotive landscape that heavily favors electric vehicles. The repercussions have compelled the company to make a heart-wrenching decision: indefinitely suspending its operations in China and initiating staff layoffs.
The company took to Chinese social media platforms to communicate its predicament, underscoring the adverse impact of China’s ongoing shift towards cleaner energy alternatives on its existing lineup of vehicles. As a result of this transition, sales have paled in comparison to their projected targets. In a poignant official notification, Mitsubishi emphasized the exhaustive efforts undertaken by both management and shareholders to confront these challenges. Yet, the unforgiving market conditions left them with no choice but to make a somber pivot towards new energy vehicles. Despite the reluctance and regret that shroud this decision, the company envisions this as an opportunity to revive itself after weathering the imminent trials and tribulations.
Mitsubishi’s struggles in the Chinese market serve as a glaring testament to the mounting pressure faced by other Japanese automakers grappling to keep up with the blistering pace of electric car development. As the electric vehicle market thrives, more established players like Mitsubishi have suffered a loss of market share to nimble and innovative competitors like Tesla and BYD. Notably, Honda and Nissan have been grappling with declining sales in China for at least two years, while Toyota, a long-standing industry leader, experienced a significant delivery slump last year, breaking a decade-long trend of growth.
In 2019, Mitsubishi’s annual sales in China soared to an impressive 134,500 vehicles. However, this promising trajectory took a disheartening turn, with sales plummeting to a mere 34,575 automobiles in 2022. The situation further deteriorated, with only 1,530 vehicles sold in January and an unprecedented zero sales recorded in April. These staggering figures underscore the struggle Mitsubishi faces in capturing a significant market share in the electric vehicle segment. As a case in point, only 515 Airtrek electric SUVs were sold in China by Mitsubishi throughout the previous year.
In response to the mounting challenges and in a bid to stay in stride with competitors’ sustainability efforts, Mitsubishi had earlier declared an ambitious plan. The company aims to electrify 100% of its global vehicle lineup by fiscal 2035, marking a transformative shift in its business strategy. To bolster this endeavor, Mitsubishi intends to invest up to a staggering 1.8 trillion yen (approximately $13 billion) in electrification by 2030.
The industry’s watchful gaze remains fixed on Mitsubishi as it embarks on its journey into the realm of new energy vehicles. The suspension of operations in China serves as a stark reflection of the arduous path ahead, yet the company’s unwavering commitment to revitalization through electrification speaks volumes about its adaptability and resilience in the face of an ever-evolving market. As the automotive landscape rapidly transitions towards electric mobility, Mitsubishi’s strategic decisions in the coming years will undoubtedly play a pivotal role in defining its position in this dynamic and ever-changing market.
