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31
MITSUBISHI MOTORS CORPORATION ANNUAL REPORT 2006
Regional Topics—Asia, ASEAN and Other Regions
쎱 North Asia
China’s automobile market continues to grow at a
double-digit pace, despite already having an annual sales
volume of nearly six million vehicles, a level comparable
with the Japanese market. MMC will work to strengthen
its operating structure in the Chinese market in con-
junction with expanding the lineup of local Mitsubishi-
brand vehicles, making the most of the Mitsubishi
brand’s strong image in China. To supply Mitsubishi-
brand vehicles that meet the requirements of this diver-
sifying and increasingly sophisticated market, MMC
commissioned a new R&D Center in Shanghai with the
establishment of Lingfa Car Technical Consulting
(Shanghai) Ltd. in January 2006. Plans also call for
establishing a local integrated sales company before
the end of March 2007 which will focus on vehicles
imported from Japan.
In April 2006, MMC concluded agreements with
China Motor Corporation and Fujian Motor Industrial
Corporation on taking a direct equity interest in South
East (Fujian) Motor Co., Ltd. (SEM). MMC plans to ac-
quire 25% of the issued shares of SEM. The goal is to
make SEM a key production and sales base for
Mitsubishi-brand vehicles.
Following this investment, SEM will produce and sell
the Mitsubishi-brand
Lancer
,
Space Wagon
(
Chariot
Grandis
in Japan), and
Galant
models in fiscal year
2006. The company further plans to enlarge its local
sales network to 400 dealerships through the inclusion
of 200 SEM dealerships alongside 200 existing
Mitsubishi-brand dealerships by the end of the current
fiscal year.
Moreover, MMC is currently considering plans to es-
tablish a new venture business with Hunan Changfeng
Motor Co., Ltd. (CFA) to serve as an SUV production base
in China. CFA began production and sales of the Mitsubishi-
brand
Pajero (Montero)
model in December 2004.
In another development, in fiscal year 2006, MMC
will export from Japan the
Lancer Evolution IX
and new
Outlander
models to China.
In fiscal year 2005, sales volume of Mitsubishi brand
vehicles in China was only 23,000 units, compared with
total sales volume of 129,000 units. Through various
initiatives to increase sales of Mitsubishi brand vehicles,
including those described above, MMC aims to raise MMC
brand sales volume to 82,000 units in fiscal year 2006.
MMC currently produces approximately 150,000 en-
gines per year at two engine-manufacturing companies
in China: Shenyang Aerospace Mitsubishi Motors Engine
Manufacturing Co., Ltd. (SAME) and Harbin Dongan
Automotive Engine Manufacturing Co., Ltd. (HDMC),
in which MMC holds equity stakes of 25% and 15.3%,
respectively. MMC is considering plans to convert these
two companies into key engine-manufacturing bases for
Asia. Particularly in regard to SAME, MMC plans to raise
its equity interest, thus bringing total foreign holdings
in SAME to 51% and obtaining a controlling interest in
this firm. With additional strengths in industrial engines,
SAME has won a contract to supply 15,000 engines
per year to a U.S. industrial machinery manufacturer.
Lancer (made by SEM) Space Wagon (made by SEM; Chariot Grandis in Japan)