Changfeng is currently a three-way joint venture located in central China's Hunan province. Hunan's provincial government owns 56.4 percent, Guangzhou Auto owns 29 percent, and Mitsubishi holds a 14.6 percent stake.

Under an agreement signed by Mitsubishi and Guangzhou, the provincial government will give up its stake in Changfeng, which will be delisted from the Shanghai stock exchange and reorganized as a two-way joint venture.

Mitsubishi and Guangzhou said they plan to introduce new models and expand Changfeng's production capacity.

With annual production capacity of 100,000 units, the joint venture builds the Changfeng-badged Liebao and Liebao Feiteng SUVs as well as the Mitsubishi-badged Pajero.

In addition to Changfeng, Mitsubishi owns a 25 stake in Soueast (Fujian) Motor Co., an automaker in east China's Fujian province. Soueast builds the Mitsubishi-badged Galant and Lancer sedans.

In the first nine months of this year, a total of 46,100 Mitsubishi vehicles were sold in China, up 95 percent from a year earlier, according to statistics from J.D. Power and Associates.

Located in the south China province of Guangdong, Guangzhou Auto has passenger vehicle joint ventures with Toyota Motor Corp., Honda Motor Co. and Fiat S.p.A.

Guangzhou is China's sixth largest domestic automaker, with group sales of 539,500 units in the first nine months.