Mitsubishi and Guangzhou Auto sign JV agreement

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Mitsubishi and Guangzhou Auto have officially signed an agreement that will see the two parties set up a joint venture in China within the next year. Originally Mitsubishi had an SUV building JV with Changfeng, but when Changfeng was taken over by Guangzhou Auo Mitsubishi went direct to Guangzhou Auto to set up a new JV.

Guangzhou Auto has quickly become a major player in the Chinese auto market with its joint ventures with Honda, Toyota, Fiat, and now Mitsubishi. It is also expected to sign a deal with Fiat’s partner, Chrysler, which will see it produce the Jeep range of SUV’s in China.

The JV will officially come into effect on June 2011 and production will begin in July 2012 with a sales goal of 250,000 cars per year within a five year period. It is not entirely clear what will happen to Mitsubishi’s other joint venture with SouEast Auto’s that sees the two produce passenger cars such as the Lancer for the Chinese market, Mitsubishi have said before that the SouEast JV will remain a passenger car only production facility and also Mitsubishi have said that they have no plans to produce SUV’s in China, preffering to import high end models directly from Japan. The aim of the new JV with Guangzhou Auto is not entirely clear as of yet, but it is likely to see the Mitsubishi SUV range put into production in China.