Citing a senior source close to the talks, Car Dealer Magazine understands that they fell through because of "substantial" differences in the perceived value of the Colt Car Company, Mitsubishi's UK importer.
Last month, it emerged that the parent company of Ssangyong's UK operations - Gibraltar-based Bassadone Automotive Group - was in talks with the global Mitsubishi brand over buying distribution rights for its cars in the UK.
However, the source suggests that Mitsubishi had "unrealistic expectations" of what its UK business was worth, meaning both parties were "worlds apart".
Mitsubishi announced in the summer that it would halt new model launches in Europe as part of a global cost-cutting operation, effectively sparking the brand's withdrawal from the market.
In a statement released by Mitsubishi the company has confirmed it will move to an aftersales-only operation:
“Although there has been dialogue with interested parties regarding aspects of the Mitsubishi Motors in the UK business, the decision has now been made not to progress these conversations further."
The statement continues: "In the coming months Mitsubishi Motors in the UK will begin its transition into an aftersales business, backed by its majority shareholder Mitsubishi Corporation and Mitsubishi Motors Corporation, to ensure the 350,000 Mitsubishi drivers on UK roads have full support in terms of parts, accessories, maintenance, warranty, recalls and repairs well into the future.”
Autocar understands from sources that while the timeline is not set in stone, the transition to an aftersales-only company will be concluded at the end of 2021.
Ssangyong's main interest in the Colt Car Company was reportedly its dealer operations, which would allow rapid growth of the Korean maker's sparse network.
"We have already taken on 10 Mitsubishi dealers and are in talks with 20 more," a Ssangyong source told Car Dealer.
It's likely that the failed takeover won't be good news for the Colt Car Company's workforce. A number of redundancies are said to have already been made, and further could be possible.