Mitsubishi Motors to leave Europe

8 years ago by in Business, Featured

Mitsubishi Motors may become the first major Japanese car maker to withdraw from Europe, if plans to sell its production facility in Holland by 2013 go through.

The company is in its fourth consecutive year of declining sales in Europe and registered a Y11.4 billion ($143 million) loss last quarter on the continent.

Mitsubishi has been producing the Colt and the Outlander models at the Dutch factory since 1991, but has never gone up to reaching its 200,000 units a year maximum capacity.

“The Netherlands does not spring to mind as a hub of European automobile manufacturing,” says Paul Van Horn, an analyst who covers the auto market in Benelux region (Belgium, the Netherlands and Luxemburg).

“The NedCar BV plant is basically pretty outdated, and Mitsubishi imported almost all their components from Japan,” he adds. “Even before the exchange rate of the yen began to deteriorate against the Euro, it was a comparatively expensive factory for building automotives.”

Mitsubishi will start negotiating with the Dutch government a takeover of its share in the NedCar BV subsidiary. About 1,500 people work at the facility.