Japanese automobile manufacturer Mitsubishi Motors has officially announced that it has pulled out of the Chinese market following a steep decline in sales. The Japanese automaker seemingly could not keep pace with the cut-throat competition in China. Undoubtedly, Mitsubishi’s exit from the Chinese market would have been very painful for the company as demand for vehicles, especially fully electric vehicles, is on the rise in the country.

It is also worth-mentioning here that the Japanese manufacturer’s reluctance to produce battery electric vehicles (BEVs) is believed to have been one of the main factors responsible for the company’s exit from China. The company has thus far excessively remained dependant on plug-in hybrid models, which is believed to have been a big part of the problem.

For several years, Mitsubishi remained very popular in the Chinese market. In the year of 2019, the automobile brand sold 134,500 vehicles in the country, while a number of upcoming models were in the pipeline. The majority of which were plug-in hybrids vehicles (PHEVs). Unluckily, the company’s sales declined steeply. By the year of 2022, the company’s sales slipped to 34,500 units in China, mainly due to an unprecedented demand for fully electric vehicles.

The unlucky manufacturer’s sole all-electric offering is the Airtrek EV, which entered the market too late. Additionally, it was more expensive than its competitors, which resulted in poor sales. The company could sell merely 515 Airtrek EVs during 2022.

Mitsubishi’s exit from the Chinese car market is an apt example of what can happen if automakers that become complacent with regard to their products. After officially exiting from China, Mitsubishi indicated that it would increase its focus on battery electric vehicles. It has plans to produce and sell at least four new EVs by the end of 2035. In fact, it wants to all of its sales to be either electric or hybrid by the mid of next decade.

Mitsubishi is not the only Japanese manufacturer that struggled in China – the world’s largest car market. Several other world-famous brands, including Mazda, Nissan and Honda, are facing harsh times in Japan. While Toyota remains a key player in the Chinese market, its last year sales declined for the first time in more than a decade. Unquestionably, Japanese automakers need to accelerate their shift from hybrids to EVs if they really want to stay competitive in the Chinese car market.