Mitsubishi Motors Corp. is planning a stake increase in Hunan Changfeng Motor Co., Ltd. according to Chinese media sources.

After the deal, Mitsubishi Motors is likely to take 30% share in Changfeng Motor, a rise from the current 16.07%. It will still be the second largest shareholder in the Chinese automaker.

Changfeng Motor's Chinese parent Chang Feng (Group) Co., Ltd. is reported to remain the controlling shareholder with a 50% stake in the automaker.

Mitsubishi Corp., Japan's largest trading company, will control the remaining 20%.

As a result, the two foreign companies will hold a combined stake of 50% in Changfeng Motor, up from the current 20.09%. Foreign companies cannot own a stake of more than 50% in a joint venture in China, according to ongoing rules.

Mitsubishi Motors has signed a memorandum of understanding (MOU) but a final agreement is yet to be signed.

Reports say that discussions on models and branding are currently taking place.