Japan's Mitsubishi Motors to extend production in China beyond May

TOKYO Reuters - Mitsubishi Motors Corp will extend its production in China beyond May, the Yomiuri newspaper reported on Tuesday, highlighting challenges the Japanese car maker faces in the world's largest auto market.

Mitsubishi Motors is discussing when it will resume production in China with its local partner, a company spokeswoman said.

Last month, the Japanese company said that it had halted production of its Outlander, a sport utility vehicle SUV in China for three months until end-May, and would take a $78 million charge for slowing sales at its joint venture with state-owned GAC Group.

In China, SUVs account for a significant portion of the electric vehicle industry, with price cuts and the launch of new models from both local and foreign brands resulting in a decline in sales of gasoline-powered vehicles.

In 2012, Mitsubishi Motors, Japan's China unit, has not decided when to resume production in the country, Yomiuri said.

Japan's automakers have faced a sales crisis in China due to a rapid shift to electric cars, which has led to a decrease in buying of internal combustion engines. In December, Mitsubishi Motors introduced the new Outlander model in China.