Mitsubishi Motors Corp. is considering pulling out of car production in China, sources familiar with the matter said Thursday, as the Japanese automaker's sales slump amid a rapid shift to electric vehicles in the country.

Mitsubishi Motors, which halted output in China in March due to falling sales and the rise of local brands, now plans to focus its resources on the Southeast Asian market, the sources said.

In China, the Japanese company had been making mainly gasoline-powered cars at a factory in Hunan Province under a joint venture with Guangzhou Automobile Group. The factory is the only Mitsubishi Motors plant in the country.

As part of efforts to reverse its sluggish sales, the Japanese automaker launched a new hybrid version of its flagship Outlander sport utility vehicle for the Chinese market in December.

But that proved insufficient amid the faster-than-expected shift to all-electric cars and the expanding market share of local brands in China, now the biggest EV market in the world, the sources said.

Mitsubishi is holding talks with its local production partner but no formal decision has been made on the matter, a company official said.

The automaker is not the only Japanese company struggling with sluggish sales in China.

Nissan Motor Co. has lowered its sales outlook for China in fiscal 2023 to 800,000 vehicles from an earlier estimate of 1.13 million, while truck maker Hino Motors Ltd. plans to compile measures to revamp its sales in the country this fall.

Mazda Motor Corp. said last month its sales in China in the three months ended June fell 17 percent from a year earlier but added it is not considering pulling out of the market.

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