TOKYO: Japan’s Mitsubishi Motors will end production in China, the company said on Tuesday, after failing to keep pace with the local market’s rapid shift to electric vehicles.

The automaker said its sales had slumped and it would restructure its joint venture with Guangzhou Automobile Group, recording a 24.3 billion yen ($162 million) “extraordinary loss” for the financial year ending March 2024.

“Local production of Mitsubishi brand vehicles in China will be terminated,” the company said in a statement released Tuesday.

Guangzhou Automobile Group will wholly acquire the joint venture, and use production capacity for its electric vehicle brand Aion, the statement added.

EVs made up 20 percent of new cars sold in China last year, compared with around 15 percent in western Europe and 5.3 percent in the United States, according to a PwC study. The auto industry in Japan still largely favours hybrid cars over EVs.

In China, “the shift to electric vehicles is accelerating faster than expected, and consumers are rapidly undergoing significant changes in their brand and segment choices,” Mitsubishi said. The firm said it had attempted to regain momentum in China by releasing a new model last year, but it “continued to fall short” of its target.