Mitsubishi Motors said on Wednesday it would spend JPY8.75bn to take a 25% stake in South East (Fujian) Motor, a 50-50 joint venture between China’s Fujian Motor Industrial and Taiwan’s China Motor.
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According to Kyodo News, citing a Mitsubishi official, the agreement signed in 2004 by Mitsubishi and China Motor, which is 14% owned by Mitsubishi, called for the Japanese automaker to assist in the operations of SEM primarily through technological support, but Mitsubishi has now decided to buy into SEM as part of a move to let the Chinese venture build and sell its output under the Mitsubishi brand.
SEM, which was founded in 1995 in the southern China province, now sells cars including those based on Mitsubishi’s Lancer model under its own brand.
After Mitsubishi’s acquisition of an equity stake in SEM, the Chinese venture will be owned 50% by Fujian and 25% by China Motor.
The move marks Mitsubishi’s fourth equity investment in mainland China after those in Shenyang Aerospace Mitsubishi Motors Engine Manufacturing, Harbin Dongan Automotive Engine Manufacturing and Hunan Changfeng Motor.
Mitsubishi vehicles sold under the Japanese company’s label are estimated to have totaled 22,000 vehicles in China in fiscal 2005 and Mitsubishi’s fiscal 2006 projection calls for raising the figure to 82,000 units by expanding its dealership network. Those shipped under Chinese firms’ brands came to about 107,000 units in fiscal 2005, Kyodo News said.
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