Introduction: A Major Departure Reshapes the Global Car Industry
Mitsubishi Motors, the legendary Japanese car manufacturer, has officially concluded its decades-long engine production operations in China. This historic move not only marks a full retreat from the world’s most important car market but also symbolises the immense challenges traditional automakers face in an era dominated by electrification, rapid innovation, and shifting consumer loyalties. For UK readers—and for all those invested in the future of motoring—the story invites a closer look at why Mitsubishi made this decision, its roots, and what it means for the British automotive market and car enthusiasts.
The End of an Era for Mitsubishi in China
For more than two decades, Mitsubishi played a major role in China’s automotive industry. The Shenyang Aerospace Mitsubishi Motors Engine Manufacturing Co., Ltd. (SAME), a joint venture founded in 1997, produced engines for Mitsubishi-branded vehicles and supported the supply chains of numerous Chinese automakers. At its peak, Mitsubishi’s local partnerships fuelled growth and seemed poised for long-term success.
But as 2025 unfolds, the engine that once powered so much promise has finally shut down for good. On 22 July 2025, Mitsubishi Motors officially ended its partnership in the joint venture, withdrawing all investments, sharing, and management. Overnight, the storied company became just another name in a growing list of foreign car brands bowing out of China’s fiercely competitive automotive market.
Why Did Mitsubishi Quit China Engine Production?
Reasons Behind the Decision
Mitsubishi’s exit is not an isolated incident, but the result of several intertwined factors that have changed the global auto industry:
1. China’s Rapid Shift to Electric Vehicles
Arguably the biggest driver of Mitsubishi’s withdrawal was China’s immense acceleration towards electrification. Chinese policy, consumer enthusiasm, and local government incentives have turned the world’s largest car market into a powerhouse for battery-electric and plug-in hybrid models. While once a champion of reliable internal combustion engine (ICE) cars, Mitsubishi struggled to keep pace with the rising demand for electric vehicles (EVs). Its delay in rolling out competitive EVs in China, and its continued reliance on petrol power, left it exposed as consumers and the government moved decisively towards new energy solutions.
2. Competition from Domestic Chinese Brands
The competitive landscape in China rapidly transformed as local brands such as BYD, NIO, and Geely leveraged government support, low prices, and innovative design to draw customers away from foreign firms. In fact, by 2025, Chinese automakers account for about 69% of the domestic market, up from just 38% in 2020, illustrating an astonishing shift in brand loyalty and consumer trust. Mitsubishi, like many global legacy car brands, found itself unable to match the pace of innovation, digital integration, and cost-efficiency offered by its local counterparts.
3. Declining Sales and Financial Losses
Mitsubishi’s financials reflected its troubles. First-quarter profits for 2025 plunged by 84%, with heavy tariffs and falling demand further eroding margins. The now-terminated SAME joint venture, which had once supplied about 30% of China’s locally produced vehicles, ran at a loss as the market decisively shifted from mechanical to electrical engineering at mass scale. Mitsubishi had incurred significant investment losses and a negative net worth in China by the end of 2023.
4. Strategic Realignment for Global Survival
Mitsubishi’s major withdrawal from China is part of a wider, strategic realignment towards electrification and global sustainability goals. Rather than continuing to lose ground in China, the company is now focusing investment on developing competitive plug-in hybrid and fully electric vehicles for core markets in South East Asia, North America, and Europe, including the UK.
Timeline of Mitsubishi’s Retreat from China
Mitsubishi’s journey in China spanned decades and was filled with milestones and missteps:
- 1973: Began exporting trucks to China.
- 1997/1998: Established the Shenyang Aerospace Mitsubishi engine joint venture.
- 2012: Formed GAC Mitsubishi, a major partnership with Guangzhou Automobile Group and Mitsubishi Corporation.
- 2018: Outlander SUV sales peaked at 105,600 units.
- 2022: Deliveries had fallen sharply to just over 33,000 units.
- March 2023: Announced an official stop on car production in China.
- October 2023: GAC assumed full ownership, Mitsubishi effectively out.
- July 2025: Mitsubishi formally exited China as an auto manufacturer and engine supplier.
Each retreating step reflects a broader struggle by foreign carmakers to stay relevant in China—a market where innovation, electrification, and national brand loyalty now reign.
The Broader Picture: Foreign Brands Struggle Across China
Mitsubishi’s exit is not unique but symptomatic of a wider challenge facing legacy foreign automakers. Japanese, European, and American car brands have seen their technology lead evaporate as China’s domestic players leapfrog ahead, particularly in the EV sector. Established luxury brands like BMW and Porsche also posted double-digit sales declines in China in 2024, as local brands won market share with cutting-edge features and competitive pricing. Price wars, slowing consumer demand, and new protectionist policies further compounded these woes.
The story extends beyond cars themselves. Foreign brands operating in steel, copper, and electronics have also had to “de-risk” or partially decouple their China strategy due to trade tensions, industrial policy shifts, and the drive for self-reliance among Chinese manufacturers.
How Mitsubishi’s China Exit Affects the UK Car Market
Chinese Brands Enter the UK
Britain’s own car industry has, in recent years, become an attractive target for global carmakers—including the very Chinese automakers that have risen to dominance in their home country. In 2024, UK new car sales included roughly 5% market share for Chinese brands, most prominently via MG, which is owned by Shanghai Automotive Industry Corporation (SAIC), and by up-and-coming brands like BYD and Ora.
The UK, with its unique market size, lack of domestic volume manufacturers, and open approach to new entrants, is now witnessing intense competition from Chinese automotive innovators. Rapid consumer adoption is driven by price, value for money, technology, and the rich specifications Chinese brands offer. UK consumers are relatively brand-agnostic and are happy to try new models if the deal is right.
Impacts on UK Buyers and Industry
For British motorists and industry workers, the ripple effects are palpable:
- Dealers and Supply Chains: Dealers are under pressure to adapt, partnering with new Chinese brands and building networks for servicing, aftersales, and spares.
- Value and Residuals: The arrival of feature-packed, affordable EVs and ICEs from China may erode the residual value of established brands, compelling British buyers to re-evaluate their options.
- Brand Perceptions: Surveys show that British car buyers are more open than ever to new brands from China if prices are competitive and quality is not compromised. Prestige buyers are similarly inclined to switch if there are meaningful discounts.
However, the UK’s shift towards electrification, right-hand drive requirements, and the need for robust aftersales networks will moderate how quickly Chinese brands dominate local sales.
Expert Opinions and Official Statements
UK industry analysts note that Mitsubishi’s withdrawal is part of a reshuffling of the global automotive hierarchy, as automakers unable to match the rapid evolution in China lose their footing both there and globally.
One analyst observed: “Foreign brands have lost their technology advantage, and at the same time, Chinese consumers seem more willing to buy domestic brands”. From a UK industry perspective, the rebalancing offers domestic stakeholders an opportunity to leverage legacy strengths—engineering and luxury craftsmanship—while remaining competitive in an evolving European car market.
At the official level, GAC, Mitsubishi’s joint venture partner, stated shareholders would “safeguard employees’ lawful rights and interests”. Mitsubishi, for its part, cited “the rapid transformation of China’s automotive industry” as the driving force behind its exit and made clear its intention to compete in other regions by investing heavily in electrification.
The Road Ahead: Mitsubishi’s Global Strategy
The Mitsubishi story represents a turning point in the auto industry’s long relationship with China. The company is now investing up to €200m in Ampere, a Renault-backed EV project intended to fuel future innovation and help Mitsubishi maintain competitiveness in Europe and other core markets. The retreat from China frees up resources for more targeted investments, with a renewed promise to deliver fully electric and plug-in hybrid vehicles across the UK and EU markets by 2035.
Industry watchers predict Mitsubishi, like many historic brands, will increasingly focus on “asset-light” strategies, investing in software and digital platforms, and collaborating with other carmakers to share technology and manage costs.
Frequently Asked Questions (FAQs)
1. Why did Mitsubishi stop producing engines in China?
Mitsubishi Motors stopped producing engines in China due to the rapid rise of electric vehicles and sustained losses in market share. Domestic Chinese brands outpaced them with innovative and affordable new energy vehicles, leading to poor sales for Mitsubishi and making traditional engine manufacturing unviable. The closure aligns with Mitsubishi’s strategy to focus on electrification globally.
2. Will this exit affect Mitsubishi cars sold in the UK?
Mitsubishi cars currently available in the UK are not immediately affected by the China exit, as the brand’s operations here now source vehicles from other regions, especially South East Asia and Japan. However, Mitsubishi’s withdrawal from China signals a renewed focus on electric vehicles, meaning future UK offerings will increasingly feature advanced electrified powertrains rather than traditional petrol engines.
3. How are Chinese car brands impacting the UK market?
Chinese car manufacturers such as MG, BYD, and Ora are rapidly expanding in the British market, now accounting for around 5% of new car sales. UK consumers, motivated by value, technology, and design, are proving open to Chinese brands, providing fresh competition for established European and Japanese manufacturers.
4. What does this mean for legacy car brands in the UK?
Mitsubishi’s retreat underlines the challenges faced by all legacy carmakers, including iconic British marques now under foreign ownership. To keep up with evolving consumer tastes, technological demands, and value expectations, these brands must accelerate their electrification strategies and focus on software-driven experiences.
5. Will jobs be lost in the UK due to Mitsubishi’s exit from China?
While job impacts from Mitsubishi’s China exit are mostly limited to Asia, the broader reorganisation of manufacturing and supply chains across the industry could have knock-on effects. Notably, British dealers and aftersales partners must stay flexible as the influx of new models and brands from China and elsewhere reshapes the local market.
Conclusion: The Industry’s Transformation in Real Time
Mitsubishi’s exit from China engine production stands as a powerful reminder of just how fast the world’s automotive industry is changing. The future of motoring—both for the UK and globally—will be shaped by innovation, adaptability, and a willingness to embrace new realities.
For UK readers, this is a chance to watch history unfold and to consider what truly matters in a modern car: technology, sustainability, value, and a brand’s ability to keep up with the times.
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