Mitsubishi Mulling JV with Changfeng

[Admin]

2006-06-30
Jiji Press English News Service

Beijing, June 30 (Jiji Press)--Japan's Mitsubishi Motors Corp. is planning to form a new vehicle production joint venture in China, informed sources said Friday.

The joint venture is likely to be formed on a fifty-fifty basis by Mitsubishi and Hunan Changfeng Motor Co., a middle-ranking Chinese automaker owned 16 pct by Mitsubishi, the sources said. Another Japanese company may invest in the joint venture, they said.

Mitsubishi and Hunan Changfeng will discuss specifics about the plan, including vehicle models to be produced, as early as next week, the sources said.

The new company may chiefly manufacture sport-utility vehicles at an existing plant of Hunan Changfeng, the sources said.

Still, the sources said it seems difficult for Mitsubishi and Hunan Changfeng to establish the joint firm by the end of 2006 as they will unlikely be able to complete necessary procedures by the year-end.END

(c) 2006 Jiji Press English News Service. Provided by ProQuest Information and Learning. All rights Reserved.

[dragin]

Mitsubishi has its fingers in many pies in the Chinese auto industry. It is aligned in one way or another with, Dongfeng Auto, Beijing Jeep, Soueast Auto, Dong'an Engine, Shenyang Aerospace Engine, FAW and Brilliance, to name a few. In fact following its stumble in the North American market it finds itself spread too thin in the Chinese industry. But in the face of big problems it somehow keeps on truckin.

It was Mitsubishi technology that gave Hyundai a boost toward success when it was struggling in its early days.

Actually Mitsubishi has been talking with Changfeng for years about increasing its 20% stake. Maybe now is the time for it to consolidate its efforts, commit to helping Changfeng develop new vehicles, to include a green car, and then reenter the US market by another more promising route.

[CCF mod]

From Autoblog

Forming a joint-venture with a Chinese partner seems to be the order of the day for most carmakers around the world. The latest company to join the bandwagon is Mitsubishi, which has announced that it will partner with Hunan Changfeng Motors to manufacture a range of Mitsu-branded sedans for the Chinese domestic market.

Changfeng has already worked with Mitsubishi in the past, building versions of the Pajero SUV, but this time 'round the two will be forming a 50-50 joint venture to produce a range of new vehicles. According to Chen Zhengchu, Changfeng's General Manager, the deal could potentially see Mitsubishi's Chinese production rise to roughly 100,000 cars annually and should rise further in ensuing years.

Most analysts consider the deal a win for both sides. Mitsubishi gets a stronger foothold in the rapidly expanding Chinese market, while Changfeng's rep will improve in the international spotlight. As it stands, both parties are still at the negotiating table and an application has been sent to industry regulators.

[ash]

North America use to be the big new market. China is a new frontier and with more potential buyers. There may be a day that China will be the world leader of manufactured goods. China will also be needing raw materials and has already looked into the Athabasca tar sands. China holds billions in American Bonds and may be using them to acquire more global business's.

[pokershark]

YAY MITSUBISHI. i know Mitsu holds about 14% stake in changfeng, and that the pajero has to names and brands in china. i think they should increase their stake in chang feng, and in the chineese market in general. i think the amount of time and money wast..i mean spent on the US market should be reconsidered. i know they need the extra capital, but business that make it big take advantage of markets that had potential from they were small.

Toyota took the import market (honda too,.although their name doesnt make headlines like it used to) the market had potential,...and the entrepreneurs over in japan 'pounced' on the opportunity.

i personaly dont know what it takes to run a car company, but i would like to see mitsu break out of the net thay have caught themselves in, and break free. their problem,..as ive said time and time before is that people dont want a galant, not because they dont like it, nor because its a bad vehicle, but because for similar money thay can get camry or accord..simple...so clearly u can market your cars DIRECTLY against them,...unless ur gm or ford and billions are at stake and/or have been lost.

in conclusion, i say this is a move in the right direction and although its too little...its not too late.....yet

[Rally Red Lancer GTS]

Good deal, Mitsubishi. Make your hold stronger in China, men!

[Rally Red Lancer GTS]

With the success of the 2008 Mitsubishi Lancer and 2007 Mitsubishi Outlander in America this is no longer a problem for Mitsubishi. Their Galant is still facing the large competition of the Honda Accord and Toyota Camry and that problem is not improving, true. Still nothing smaller than the Lancer from Mitsubishi, either.

Perhaps a joint venture with Chagfeng can produce a mini-car for the Chinese market and Iran and Pakistan and South America and maybe even Europe and NA? Mitsubishi's fortunes have picked up considerably by their 2007 sales in NA.

[agent]

Mitsubishi has always making great looking cars and I hope with Changfeng also they keep the good work.

[dragin]

Mitsubishi has had a long term licensing agreement with Changfeng as it has with many others in China, and the news about an increase in its stake in Changfeng is not news at all. Such speculation has been around for awhile. Here is an article from auto-asia.com dated October 24, 2004.

Hunan Changfeng Set To Assemble Latest Pajero

Mitsubishi will start building a more modern version of its Pajero SUV in China at a factory operated by its local partner, Hunan Changfeng Motor.

Hunan currently builds and sells older Pajero models under a Chinese name, Liebao. The new licence agreement covers three- and five-door versions of the newer CK series. They will be sold under the name Pajero, rather than Liebao, and it’s not clear exactly how the agreement will impact the existing Liebao business.

Mitsubishi, which is the second largest shareholder of Changfeng with a stake of just over 16 percent, says it may lift its stake as high as 50 percent to help strengthen its business in China.

I guess seeing is believing..........

[CCF mod]

From Global Auto Sourcing:

December 19, 2007 – Japanese automaker Mitsubishi is planning to form a 50-50 joint venture with Chinese automaker Changfeng, Chinese web media sina.com reported today.

"Changfeng is planning to have substantial negotiations with Mitsubishi over the projected joint venture project," said Chen Zhengchu, general manager of the Hunan-based Changfeng Motors. "We are going to form a 50-50 joint venture with Mitsubishi and as such, we will make some adjustments on our investment structure accordingly."

The two sides are enthusiastic over forming a joint venture company, but there are a lot of things to prepare, Chen said.

There are differences that must be ironed out between the two partners before the joint venture can be formed, the Sina.com report said.

Mitsubishi plans to produce sedan and MPV models with another partner, the Fujian-based Southeast Motors and it hopes Changfeng concentrates on the production of SUV vehicles. However, Changfeng has its own agenda: it hopes to produce sedan vehicles too.

Currently, Changfeng has an annual capacity to produce 100,000 vehicles. With the completion of its new production base at Yongzhou, Hunan province, the automaker will have a total capacity of 200,000 vehicles.

Currently Changfeng produces a SUV vehicle Liebao on its own and Pajero SUV for Mitsubishi.