Mitsubishi Motors Corp., Japan's fastest-growing car exporter, will shut a factory in Australia after models made there failed to attract buyers, said three company officials who declined to be named.
The carmaker will still meet its profit goal of ¥20 billion for the year ending March 31, even with the cost of the plant closure, they said, adding that the timing of the closure has not yet been decided.
Mitsubishi Motors is shifting production to China and Russia, where demand for its sport utility vehicles and sedans is rising. The Australian factory in the south of Adelaide uses only a third of its production capacity.
Production at the plant has slumped from 59,000 vehicles in 1997 as the Australian government has reduced tariffs for imported cars. To stem the slide in sales of locally built models, Mitsubishi Motors in 2005 introduced the 380 sedan, its first new Australian-built car in nine years. The model failed to win customers, and production at the plant fell to 10,744 vehicles in 2007.
Mitsubishi Motors is preparing to open a factory in Russia and in December the government cut import duties for car parts for the company. The carmaker's sales in Russia topped 100,000 units last year, accounting for a third of its total European sales.
The automaker is also in talks with Hunan Changfeng Motors Co. to set up a venture to make SUVs in China.