Spain in talks with Mitsubishi on car battery plant

Spain is in talks with Japan's Mitsubishi Corp about building a factory for electric car batteries in the northwestern town of Vigo, Spanish Economy Minister Elena Salgado said on Thursday.

The 400 million euro plant could create around 1,500 jobs, Spanish newspapers reported.

Corp and sister company Mitsubishi Motors Corp operate a joint venture with Japanese battery maker GS Yuasa Corp to develop and produce lithium-ion batteries for electric cars. The venture, Lithium Energy Japan, is 51 percent owned by Kyoto-based GS Yuasa.

Mitsubishi Corp director Mikio Sasaki met Spain's Prime Minister Jose Luis Rodriguez Zapatero in Tokyo on Thursday.

Mitsubishi Motors has a broad-based tie-up with French group PSA Peugeot Citroen that includes a deal for the Japanese automaker to supply electric cars under the two French brands.

Vigo is the PSA's biggest production site by volume.

A GS Yuasa spokeswoman said the company was considering various options for an overseas production site for car-use lithium-ion batteries, but that no decision had been made.

Spokesmen at Mitsubishi Corp and Mitsubishi Motors said they could not confirm or deny the talks with the Spanish government.

PSA Chief Executive Philippe Varin and his Mitsubishi Motors counterpart, Osamu Masuko, met in Vigo last week, a PSA spokesman confirmed.

Spanish paper Atlantico said the two discussed prospects for the battery plant but the PSA spokesman said they met as part of an deal signed in June to look into developing electric vehicle powertrains, initially for use on light commercial vehicles.

"So as part of that agreement the two presidents met to move things along ... it was just to take stock of how it is progressing" the spokesman said.

The two embattled car makers had dropped talks earlier this year to study a capital alliance as they seek to survive intensifying competition in the global auto industry.

meeting and that "the matter is closed".

Separately, the regional government of the northeastern Spanish region of Catalonia is in talks with Chinese car manufacturer Chery Automobile Co, a regional government spokesman said, to build a 1 billion euro assembly plant. The spokesman declined to reveal more details about the plans, but Spanish media said the factory could employ up to 11,000 workers.

The factory would be the first European production plant for China's largest independent car maker.