Mitsubishi Motors may buy big in South East Motor

Mitsubishi Motors Corp, Japan's fourth-biggest automaker by sales, is in talks to buy a stake in Taiwan-based China Motor Co's (中華汽車) venture in the southeastern Chinese province of Fujian.

"Mitsubishi has expressed an interest in buying a stake and the companies are in talks,'' said Zheng Zhengda, assistant to the general manager at South East (Fujian) Motor Corp (東南汽車), China Motor's venture with Fujian Automobile Industry Corp.

Tokyo-based Mitsubishi Motors declined to comment.

Mitsubishi trying to expand outside the US to reduce its reliance on that market, where it gets most of its profit.

Toyota Motor Corp, Honda Motor Co and other automakers are stepping up investment in ventures in China, to increase their presence in the fastest-growing large-car market in the world.

"It makes sense for Japanese automakers to have several alliances in China, enabling them to expand faster," said Yoshio Inamura, who helps manage the equivalent of about US$335 million at Tokyo-Mitsubishi Asset Management.

The Chinese market is forecast to grow by a quarter this year, while European sales may drop 4.3 percent with a 3 percent decline in North America, according to the London-based World Markets Research Center.

"We have nothing to announce at the moment," Mitsubishi Motors spokesman Koichiro Uchida said.

China Motor, Taiwan's largest maker of trucks and vans, is 15 percent owned by Mitsubishi, which in turn is 37 percent owned by DaimlerChrysler AG.

South East in March started making its first sedan car, the Lioncel, which is based on the Mitsubishi's Lancer model, said Zheng. South East Motor makes and sells Delica and Freeca brand light vans in China.

The company plans to introduce the Savrin and Veryca vans in China next year, Zheng said.

Mitsubishi Motors shares fell 1.5 percent to 261 yen in Tokyo, while China Motor shares fell 2.5 percent to NT$58 in Taipei.