Japan’s Mitsubishi Motors, the latest foreign automaker to reduce its activities in the largest auto market in the world, said that it will cease production of its automobiles at its joint venture in China and transfer its ownership to its Chinese partner.

The Japanese automaker’s decision comes in the midst of intense pricing rivalry in China, which has prompted international automakers to restructure their businesses in an effort to reduce costs, including Hyundai Motor and Stellantis.

As it looks to expand its presence in Europe and other regions, Mitsubishi Motors announced separately on Tuesday that it will put up to 200 million euros ($214 million) in the new electric vehicle division of its French rival Renault.

In 2012, the Japanese carmaker partnered with the trading company Mitsubishi Corp and the Guangzhou Automobile Group (GAC) to launch a joint venture in China.

The joint venture will become a fully-owned subsidiary of GAC when Mitsubishi Motors and Mitsubishi’s share is transferred to their Chinese partner, according to the Japanese manufacturer.

In June 2024, the joint venture plant will begin manufacturing GAC’s Aion vehicles, contributing to the EV brand’s goal of reaching a 600,000 unit annual capacity by that time, the company announced in a separate announcement on the WeChat social media platform.

For its restructuring in China, Mitsubishi Motors would record a special loss of 24.3 billion yen ($162.40 million) in the current fiscal year. It left its full-year earnings outlook unchanged.

Mitsubishi Motors stated that by investing in Renault’s Ampere EV division—which the French manufacturer plans to float on the stock market next year—it hopes to advance its EV development technology.

Speaking outside of a Paris event, Renault Chairman Jean-Dominique Senard expressed his gratitude for Mitsubishi’s commitment and his continued confidence that the firm will participate in Ampere.

“As a first step of this collaboration, Ampere will supply an EV on an OEM (original equipment manufacturer) basis in the European market,” Mitsubishi said in a statement.

Senard stated that he plans to visit Mitsubishi in Japan in the near future to have a more in-depth conversation.

After Nissan Motor and Renault, Mitsubishi’s partners, completed a reorganised alliance in July, the decision was made to invest in Ampere.

In keeping with its status as a strategic investor and its acquisition of a board seat in the new business, Nissan has already pledged to invest up to 600 million euros in the division.

(Adapted from NST.com)