Mitsubishi Ends Production in Europe at the End of 2012 image

Mitsubishi Motors Corp. announced that it will stop production in Europe at the end of 2012, underlining growing excess capacity in the region as demand slackens amid the government-debt crisis.

The company will end production of Colt compact car and the Outlander sports-utility vehicle, and then shut down the European factory in Born, the Netherlands, but it will continue shipping cars from Thailand and Japan. There has been a continuous decline since 2007, due to the region’s debt crisis followed the global recession. The company expects a 13 million unit deliveries fall, translating in the 5th straight annual drop.

Last year, Mitsubishi’s output in Europe fell 12 percent to 23,808 units, compared to 4.7 percent gain in total overseas production. The decision to stop production in Europe is followed by that of forming a new Chinese joint venture by the end of September with Guangzhou Automobile Group Co., which will increase control operations in the biggest car market in the world.

“In ending production in Europe, Mitsubishi is taking its first steps to concentrate production in places like Thailand that are selected as export hubs,” said Takeshi Miyao, a Tokyo- based analyst at industry researcher Carnorama. “Demand in Europe is slipping, so they may have chosen to end production there first.”