Gearing up to bolster sales in the country, Mitsubishi Motors will grab a stake in Southeast Motor, a Chinese mainland-Taiwan joint venture in Fujian Province, according to the struggling Japanese carmaker's representative office in Beijing.

"We are negotiating a 20-to-25-per cent equity deal (with Southeast Motor and its existing parent companies)," the Mitsubishi Beijing office said in a statement to China Daily.

The Japanese firm also plans to introduce its own brand of cars into Southeast Motor, jointly held by the Chinese mainland's Fujian Automotive Industry Group and China Motor Corp from Taiwan, it said. Mitsubishi holds 14 per cent of China Motor.

Both Fujian Automotive and China Motor own 50 per cent of Southeast Motor. Total investment in Southeast Motor has reached US$227 million.

Mitsubishi did not disclose how the shares of Fujian Automotive and China Motor in Southeast Motor will change with its entry.

Sources close to the talks said Mitsubishi will sign an equity-transfer contract this month with Southeast Motor and the two shareholders. The first Mitsubishi- brand car will be launched at Southeast Motor in April.

Southeast Motor is now making the Chinese-branded Lioncel and Soveran cars, and Delica and Freeca van under technical licensing deals with Mitsubishi.

Mitsubishi currently controls a 16 per cent stake of Changfeng Automobile in Central China's Hunan Province, which is producing sport utility vehicles (SUVs) under Chinese brands and Mitsubishi's Pajero nameplate.

The Japanese group also has technical licensing deals with Beijing-Benz-DaimlerChrysler Automotive Co Ltd, DaimlerChrysler's joint venture with Beijing Automotive Industry Corp; and Harbin Aviation Industry Group, one of China's biggest mini van makers in Heilongjiang Province.

Analysts said Mitsubishi is leaning to Southeast Motor to expand its sales in China.

Mitsubishi's Beijing office said the Japanese carmaker aims to increase total sales in China, including its own brands and those of local nameplates made under its technical licences, from 120,000 vehicles last year to 310,000 units by 2008.

Mitsubishi also plans to build 500 sales stores in China exclusive for its own brands by 2008.

Southeast Motor aims to raise its annual production capacity to 300,000 vehicles in coming years with the introduction of Mitsubishi brand, from the current 120,000 units.

Beijing-Benz DaimlerChrysler Automotive, previously named Beijing Jeep, is making Mitsubishi Pajero Outlander and Sport SUVs, but sales of the two models are sluggish.

Analysts said the venture will mainly depend on fat-margin Mercedes-Benz luxury sedans in the future.

The venture started to produce Mercedes-Benz E-Class sedans at the beginning of this year.

DaimlerChrysler sold all of its 37-per cent stake in Mitsubishi last year.

Source: China Daily