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Japanese automobile giant Mitsubishi Motors Corporation has formally become a direct shareholder of South East (Fujian) Motor Co Ltd (SEM) with a 20 percent stake.

 

A deal was signed yesterday between Mitsubishi and SEM's two original shareholders, Fujian Motor Group (FJMG) and Taiwan-based China Motor Corporation (CMC).

 

The agreement says FJMG still controls 50 percent of SEM with CMC's share being decreased from 50 percent to 30 percent.

 

Mitsubishi's 20 percent share will grow to 25 percent next year. Meanwhile, as Mitsubishi also owns a small share of CMC, (currently 14 percent), the Japanese firm will actually have a 29.5 percent share of SEM by next year, said Mitsubishi's general manager Osamu Masuko.

 

"Mitsubishi started technical cooperation with SEM as early as 1996. We hope SEM can integrate our brand, product, technology and other resources so as to become the production and sales base of our passenger cars, MPVs and light business cars in China," Masuko added.

 

SEM is expected to launch Lancer, a new vehicle with the Mitsubishi trademark in June. Another new passenger car will be put on the market in September, said SEM's general manager Liu Xingtai.

 

Liu said all the new vehicles from Mitsubishi in the future will have both the logos of Mitsubishi and SEM.

 

Through the new partnership with Mitsubishi, SEM plans to launch two new cars annually in the coming years, Liu said.

 

SEM is predicted to sell 80,000 cars this year, a figure expected to reach 150,000 in three years, according to Liu.

 

At present, SEM's products are mainly directed at the everyday consumer, while its new Mitsubishi vehicles will target medium and high-end car buyers, Liu added.

 

"The direct shareholding of Mitsubishi will inject more energy into SEM to help it to become the most important partner of Mitsubishi in China," said FJMG's Chairman Lin Yuzhang.

 

"International collaboration will also play a significant role in upgrading the whole automobile manufacturing industry of Fujian Province," said Lin.

 

Located in Fuzhou of East China's Fujian Province, SEM is so far the nation's largest auto joint venture involving a mainland firm and one in Taiwan.

 

It has an annual production capacity of 150,000 cars.

 

Having been a partner of CMC in Taiwan for more than 30 years, Mitsubishi has a good reputation on the island, said Huang Wencheng, general manager with CMC.

 

"With the great potential of the mainland auto market, we believe Mitsubishi-SEM vehicles will surely have a bright future," said Huang.

 

In addition, Mitsubishi has established a new research and development center in Shanghai this year, the company's third overseas research center outside Japan. The other two are in the United States and Europe.

 

"That means China has equal or even more important status than US and Europe in Mitsubishi's global developing strategy. The center will also help our company know more about the needs of the Chinese auto market," said Masuko.

 

(China Daily April 13, 2006)