Impact: Mitsubishi Motors to end production in Europe image

Mitsubishi Motors Corp. , said on Monday it would stop manufacturing automobiles in Netherlands – Europe at the end of 2012 in the face of sluggish capacity utilization and market deterioration in Europe amid the sovereign debt crisis.

But the company said it won’t close the factory and will discuss with the Dutch government and others ways, such as selling the plant to a third party, to continue operations there.

“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.

The company had already announced plants to stop building the Colt at the plant, but had hoped to allocate a new model to the facility.

However, it said difficult economic conditions made that impossible.

“Due to the wildly fluctuating operating environment which automobile manufacturers currently face, MMC (Mitsubishi Motors) could not come up with a reasonable solution to utilise NedCar [Netherlands Car],” the company said in a statement.

The Netherlands Car, or NedCar, plant makes the Colt subcompact and the Outlander sports utility vehicle, but accounted for less than 5 percent of Mitsubishi Motors’ global output of 1.1 million vehicles in the year to last March.

The plant began operations in 1991 as a joint venture of Mitsubishi Motors and Swedish auto giant Volvo, and became a wholly owned subsidiary of the Japanese automaker in 2001.