In a sign of the rapid pace of China's transition to electric vehicles (EVs), Mitsubishi Motors has indefinitely paused its production within the nation and announced plans for job cuts.
The Japanese automaker's decision to scale back in China included stopping production at its joint venture with Guangzhou Automobile Group Co (GAC).
Competition has been stiffening in the People's Republic and consumer preferences shifting in the world's largest automobile market, which is expected to see China overtake Japan as the world’s largest car exporter in 2023.
Mitsubishi's setback follows a period where automakers in the country grapple with heightened competition from domestic Chinese brands such as GAC, NIO Inc (NYSE:NIO) and BYD, amid growing demand for EVs, as well as price cuts sparked by Tesla Inc.
The intensifying market dynamics recently led Mazda's chief executive to caution on Friday that the Chinese auto industry is entering an era where "only the fittest will endure."
Ford (NYSE:F) said last month it would stop making cars in India and focus on its increasingly EV-centres China operations, while General Motors NYSE:GM) said it would invest a significant portion in China of a planned US$35 billion in EVs and autonomous vehicles globally by 2025.
Mitsubishi said on Friday it was committed to staying in the Chinese market, but a thorough review would be carried out, including moves to "optimize the workforce."