Mitsubishi has said it is freezing all new model releases in the UK and Europe, raising fears it could pull out of the European market altogether.
The Japanese manufacturer announced the move as part of global cost-cutting plans as it looks to address a significant fall in business due to the coronavirus pandemic. Its sales halved in the first quarter of 2020 and it is predicting an annual loss of £1.6 billion this year.
Under the “small but beautiful” slogan, it intends to focus on the south-east Asian market, where it is already a far more significant player than in Europe.
In a statement, Mitsubishi said it was looking to reduce its costs by 20 per cent in the next two years and would do this by “downsizing low-profit businesses”. In Europe, the brand has just one per cent share of the new car market, compared with a 6.4 per cent share in south-east Asia.
Parents and dog owners warned over toxic blue-green algae blooms at Bedford's Priory Country Park
Here are the 12 best places for brunch in and around Bedford
Ever wondered what these houses look like inside as you walk to Bedford train station?
These are the 10 best Chinese restaurants in Bedford according to TripAdvisor reviews
Five engagement rings that are trending now
Part of the downsizing will mean that the UK and Europe will not get upcoming new models, including the new Mirage supermini, Outlander SUV and L200 pick-up. In the longer term, that could see the brand pull out completely as its outgoing models are not replaced.
Takao Kato, CEO of the Mitsubishi Motors Corporation, said: “We will shift our strategy from all-round expansion to selection and concentration.
“First of all, we will complete our structural reforms and further strengthen our competitive areas – ultimately to build a corporate structure that can surely generate profits during this mid-term period."
Colt Car Company, which is the sole importer of Mitsubishi cars to the UK and runs the brand’s dealer network said the news had come as a surprise. In a statement, it said: “The Colt Car Company has just learned that Mitsubishi Motors Corporation has frozen the development and introduction of new models for Europe, including the UK.
“We will continue to sell the existing range of Mitsubishi vehicles and to provide full customer support in terms of service, repair, warranty, recalls, parts and accessories. We will provide updates when we know more.”
It also said that it had already been exploring opportunities to import other new vehicle brands to the UK and would accelerate those discussions following Mitsubishi’s announcement.