Chinese consortium that includes several carmakers has agreed in
principle to buy Mitsubishi Motor's under-utilised NedCar car plant in
the Netherlands, according to a local press report.

The existence of the supposed deal
was promptly denied by NedCar, which said the story was based on
“unfounded speculation”. Nevertheless, the car plant, the last in the
Netherlands, could do with some fresh ideas, as it hardly fits into
Mitsubishi's global strategy.

Mitsubishi, alone among its fellow Japanese carmakers, is losing
money. The Dutch plant only built 115,000 cars last year, less than
half its capacity of 250,000. Production at the plant, looks set to
fall even further as NedCar is to now stop making the four-seater Smart car, which it manufactured on behalf of DaimlerChrysler.

Mitsubishi has cut about 1,800 jobs at NedCar since 2004 and the
company wants to axe another 1,000 jobs. The plant employs 2,600

The future of NedCar is clearly in the balance and much like the
UK's once-proud car industry, it could be China that provides the
solution. According to “well-informed sources” cited by De Telegraaf,
the consortium is understood to be considering developing a new car brand aimed at the European market.

However, even if the rumour of Chinese interest turns out to be
true, I suspect it will some years before NedPlant is producing
Chinese-designed vehicles, given their well-known shortcomings in areas
like design, safety and emissions.

According to a report
by the Economist Intelligence Unit, it will take a decade before
Chinese firms begin to technologically challenge producers in North
America and Europe. See also this EngagingChina story.