Mitsubishi says it will end production at its only western European plant, in the Netherlands, at the end of this year, a move that was expected as its sales in Europe have dropped to a third of their peak. Click below to read the rest of the story.

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The Netherlands Car, or NedCar, plant makes the Colt subcompact and the Outlander SUV, but accounted for less than 5 percent of Mitsubishi’s global output of 1.1 million vehicles in the year to last March.

With demand in western Europe expected to remain sluggish, carmakers have been shifting focus to eastern Europe and other emerging markets where projected sales growth rates are higher.

NedCar’s output has slumped to 50,000 vehicles a year compared with peak capacity of 200,000.

Speculation had been rife that Mitsubishi could close the plant, which employs about 1,500 people, after it had said it would stop making the Colt in Europe at the end of 2012.

The Japanese firm said it had not yet decided what to do with the plant. It will supply vehicles to the European market from Japan and Thailand.

Last week, Mitsubishi booked an April-December operating profit of 38.51 billion yen, but posted an operating loss in Europe of 11.4 billion yen ($148.85 million).

Sales in its European markets hit 340,000 vehicles in 2007/08, but last year dropped to 218,000.

The automaker is building a new factory in Thailand and studying increasing production in China and Brazil, where sales growth is projected to be higher than in developed nations.

Local rival Nissan, which operates a car plant, Britain’s biggest, in the northeast of England, said last month it will build a $2 billion plant in Mexico to boost sales in the Americas.

NedCar, based in Born, started in 1991 as a three-way venture between Mitsubishi, Volvo and the Dutch government. Mitsubishi became the sole shareholder in 2001 after buying out its partners.