Mitsubishi Motors plans to sell its 15% stake in Harbin Dongan Auto Engine Company, its engine joint venture plant based in the Chinese city of Harbin, according to reports in Japan.
The joint venture was originally established in 1998 to produce up to 500,000 engines per year with the Japanese automaker receiving royalty fees for transferring key technology.
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The joint venture was no longer producing engines for Mitsubishi vehicles, however, which was a key reason for the company to pull out.
Local reports suggested Mitsubishi Motors planned to sell its shareholding in the joint venture in the current financial year ending in March 2020 and had already applied for approval from local authorities for the sale. China's Changan Automobile Group and two local component manufacturers based in Harbin are understood to have agreed to buy the stake.
Mitsubishi has also been encouraged to sell its stake in the joint venture by the government led Chinese market megatrend in favour of new energy vehicles, including electric and plug-in hybrid, initially through incentives and ultimately as a result of minimum sales quotas.
Mitsubishi continues to produce vehicles and engines in China at its joint venture with Guangzhou Automobile Group.
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