July 27, 2015 / 5:43 AM / 4 years ago

Mitsubishi Motors production hubs will be Japan, SE Asia, Russia

TOKYO (Reuters) - The president of Mitsubishi Motors Corp (7211.T) said Japan, Southeast Asia and Russia will become the automaker’s principal production hubs after it quits making cars in the United States later this year because of dwindling sales there.

A Mitsubishi Motors dealership is shown in Poway, California July 27, 2015. REUTERS/Mike Blake

“Japan, ASEAN (countries), and Russia will be the main points of production for our company,” said Tetsuro Aikawa, president and chief operating officer of Japan’s sixth-biggest automaker.

Aikawa was speaking at a news conference on Monday after his company confirmed plans to end output at its sole North American plant in Normal, Illinois, and serve the U.S. market from factories in Japan and Thailand. The company’s shares rose more than 5 percent as investors welcomed the switch.

The shift comes as Mitsubishi Motors increasingly focuses output in Southeast Asia, where its pickup trucks and sports utility vehicles (SUVs) are popular. The automaker currently makes cars in Thailand and the Philippines, and said in February it will build a new factory in Indonesia for vehicles such as its Pajero Sport SUV.

Aikawa said the move to pull the plug on the Normal factory, which opened in 1988 as a joint venture of Mitsubishi Motors and its then-partner Chrysler, was prompted by low-volume production rather than shifts in foreign exchange rates making exports from Japan cheaper.

The plant will cease production by the end of November, Mitsubishi and the U.S. United Auto Workers union said on Monday in a joint statement.

“Our motivation to exit from this facility is unrelated to labor costs or our relationship with the UAW,” said Hiroshi Harunari, chief of the company’s overseas operations, in the statement.

The automaker is looking for a buyer for the U.S. plant and hopes to preserve jobs linked to the plant, Mitsubishi and the UAW said. There are 918 UAW-represented workers at the plant.

Aikawa said on Monday he thought finding a buyer for the plant would be relatively easy because demand for cars in the buoyant U.S. market was strong.

At its peak in the early 2000s, the Normal plant built more than 200,000 cars a year, while in calendar 2014 it produced 69,178 Outlander Sport vehicles. In the fiscal year ended March 2015, the company’s U.S. sales totaled 82,000, compared with a global total of around 1 million.

Additional reporting by Bernie Woodall in Detroit; Editing by Kenneth Maxwell and Phil Berlowitz

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