Mitsubishi Motors Corporation on Tuesday confirmed the closure of its Australian car-making plant from the end of March.

A Mitsubishi Europe spokesman told just-auto that the company had not yet made a separate formal announcement as such but had confirmed the closure and announced future plans for the Australian unit during a presentation of fiscal Q3/nine-month results in Tokyo earlier today.

MMC will book a one-off JPY22bn ($US206m) charge for the closure of the plant in Adelaide, South Australia state.

The plant, Chrysler Australia's Valiant facility from the early 1960s until the early 1980s, had once built a variety of Mitsubishi models for both domestic and export markets as far afield as the US, Middle East and Europe but, in recent years, had made only the 380, a RHD version of the US Galant, primarily for Australia and New Zealand.

MMC said the main reasons for closing the plant were the decline in large passenger vehicle sales in Australia, limited export opportunities due to the strong local dollar and a "slowdown" in 380 sales.

In fact, local reports have said in recent years that the 380 has never reached its targets and it has had to be 'relaunched' several times, with disappointing results.

MMC said it would focus on further growth in Australia with a full import approach [like Nissan, which pulled out of local manufacture in the early 1990s and Honda which has never built cars 'down under'].

MMC said built-up import sales in 2007 rose 32% year on year with the introduction of the Thai-built Triton light truck line, the Outlander SUV and Lancer lines from Japan, plus other models.

The company would maintain its "extensive" dealer network and continue to provide full parts, warranty and service support for its vehicles.

It also planned to strengthen the Mitsubishi Motors brand in Australia with new models and "improve the profit structure of the Australian operation by withdrawing from unprofitable business" which just-auto believes was highly discounted 380 fleet sales to maintain volume.

Graeme Roberts

Australian plant to close