nedcar.jpgA 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 workers.

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.