Mitsubishi Motors Corporation announced the termination of its joint venture agreement with Shenyang Aerospace Mit. Engine Mfg. Ltd. (Shenyang Aerospace Mitsubishi), marking the Japanese automaker’s complete withdrawal from China’s automotive manufacturing sector. This decision follows the cessation of its local car production in 2023 and underscores Mitsubishi’s strategic retreat amid China’s rapid shift toward new energy vehicles.

Established in August 1997, Shenyang Aerospace Mitsubishi had been a cornerstone of Mitsubishi’s China strategy, producing engines for both Mitsubishi-branded vehicles and numerous Chinese automakers. The joint venture, which began operations in 1998, supplied critical powertrain components to support Mitsubishi’s local assembly lines and third-party manufacturers. However, on July 2, 2025, the company was officially renamed Shenyang Guoqing Power Technology Co., Ltd., with Mitsubishi Motors, Mitsubishi Corporation exiting as shareholders.

In a statement, Mitsubishi Motors cited “the rapid transformation of China’s automotive industry” as the primary reason for its exit, emphasising a strategic reassessment of its regional priorities.

Mitsubishi’s China journey began in 1973 with exports of medium-duty trucks. By the early 2000s, its two-engine joint ventures supplied powertrains for approximately 30% of domestically produced vehicles. However, the rise of China’s new energy sector, coupled with weakening demand for internal combustion engines, eroded its market position.

The formation of GAC Mitsubishi in 2012—a 50:30:20 joint venture with Guangzhou Automobile Group (GAC) and Mitsubishi Corporation—initially showed promise. Sales peaked at 144,000 units in 2018, driven by the Outlander SUV’s 105,600-unit sales. However, annual deliveries plummeted to 33,600 units by 2022 amid intensifying competition from domestic EV brands.

By March 31, 2023, GAC Mitsubishi reported total assets of 4.198 billion yuan (582 million USD) and liabilities of 5.613 billion yuan (778 million USD), leaving a net worth of -1.414 billion yuan (-196 million USD), according to GAC disclosures. In October 2023, Mitsubishi announced plans to halt local production and restructure its China operations. GAC subsequently took full ownership of the joint venture, with plans to repurpose the plant for its EV brand, Aion, aiming for mass production by June 2024.

Mitsubishi’s exit reflects broader challenges faced by foreign automakers in China’s electrified market. Domestic brands like BYD and Tesla’s localised operations now dominate, while other joint ventures, such as GAC-FCA, have collapsed entirely.

“China’s automotive landscape has become a battlefield for EV innovation, where legacy automakers struggle to compete,” said industry analyst Chen Liwei quoted by Chinese media Jiemian news. “Mitsubishi’s retreat highlights the irreversible shift toward homegrown solutions.”