Japan’s Mitsubishi Motors yesterday said it would stop manufacturing automobiles in Europe by the end of this year, blaming a difficult operating environment in the debt-hit continent.
The Japanese carmaker produces the Colt subcompact and the Outlander sports utility models at NedCar, a wholly owned production unit in Born, the Netherlands, with about 1,500 employees.
“But we have decided to withdraw production in Europe by the end of this year due to the unfavorable business environment for us there,” a company spokeswoman said.
Mitsubishi is expected to suffer ￥22 billion (US$287 million) in operating losses in Europe for the fiscal year to next month due to stagnant sales in a continent beset by the uncertainty of a raging debt crisis.
It will be the first withdrawal from Europe by a major Japanese carmaker, local media said, adding that Mitsubishi now plans to shift its focus to emerging markets.
Mitsubishi said it would continue selling its own brand cars in Europe with shipments from plants in Japan and Thailand.
“As for the fate of NedCar, we are considering various options such as seeking a third party to maintain the facility,” the spokeswoman said, adding that it has yet to decide on whether to dismiss the factory’s workforce.
Output at NedCar, which was established in 1991, has remained sharply below its production capacity of 200,000 units a year, contributing to Mitsubishi’s operating loss in Europe, reports said.