Latest Car News in India

Tuesday, February 07, 2012

By Manoj Kumawat

Mitsubishi to stop production of Outlander SUV, Colt at Dutch plant

Mitsubishi, Japanese car giant had reportedly said that it would be winding its operations from the Dutch factory in Europe. Primarily the NedCar plant produces Mitsubishi Outlander SUV and Mitsubishi Colt and following the decision, the production of these cars will be stopped at this facility. Notably, sources say that Mitsubishi is forced to stop production primarily due to the ongoing weak economy in Europe and besides the high cost of production and other factors.

With the withdrawal in place, Mitsubishi will be pulling out the resources in place at the sick Dutch facility. Surprisingly, the Japanese car maker is in search of a possible robust buyer for the plant as there are around 1500 people employed in the facility and their resettlement is necessary. At this time, though no buyer has come up as the situation in Europe is grim and no inside player is willing to invest at this time. Besides this, it has become a worry wart for Mitsubishi as the production at the site has reportedly dipped below 50,000 cars annually. At this point of time, the plant is entirely not feasible for Mitsubishi to continue with.

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Apart from the efforts in place currently, Mitsubishi had earlier proposed to manufacture some other model at the Dutch plant but following high exchange rate and even higher labor costs, the project was turned down. In addition to this, shrink in demand in European market had added to the woes of the Japanese car giant.  

The Dutch plant situated near Maastricht was lately a facility for Volvo cars when in 2001 Mitsubishi taking full ownership of the plant. Besides Mitsubishi cars, Mercedes Smart ForFour was also built at this plant. The withdrawal also indicated the unfeasible situations going on in Europe due to the meltdown and the consequent triggering of lower demand putting pressure on the car makers. Meanwhile the company is reported to launch Mitsubishi Pajero Sports in India very soon.

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