Mitsubishi to close its only western European plant by the end of the year

Article by Christian A., on February 6, 2012

Mitsubishi will end its production at its Netherlands Car facility, its only western European plant, by the end of this year. This action was expected considering that the automaker's European sales declined to a third of its topmost figure. The NedCar plant manufactures the Outlander SUV and the Colt subcompact. However, it only comprises less than 5% of the company's worldwide output of 1.1 million units in the year until last March.

The plant employs around 1,500 people. The demand in western Europe is anticipated to remain slow-moving; thus, automakers have been changing their focus to eastern Europe and other emerging markets where sales growth rates are forecasted to be higher.

The output at NedCar has sagged to 50,000 units annually compared with its 200,000 peak capacity. There have been rumors that Mitsubishi could close the NedCar facility after it announced it would not manufacture the Colt in Europe at the end of 2012. The Japanese company stated that no decision has been made yet regarding what to do with the factory. It will supply automobiles to the European market from Thailand and Japan.

Last week, the company posted an April-December operating profit of 38.51 billion yen. On the contrary, it recorded an operating loss of 11.4 billion yen or $148.85 million in Europe. European sales hit 340,000 automobiles in 2007/08, but they declined to 218,000 units last year.

The company is constructing a new plant in Thailand and considering an increase in production in Brazil and China, where sales growth is anticipated to be higher compared to developed countries. Local competitor Nissan, which runs a vehicle factory (the largest in Britain), disclosed last month that it will construct a $2 billion facility in Mexico to increase sales in the Americas.

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