Nissan Motor Co. President and CEO Carlos Ghosn, left, and Mitsubishi Motors Corp. Chairman and CEO Osamu Masuko pose for photographers after their joint press conference at the Nissan headquarters in Yokohama, near Tokyo, Thursday, Might 12, 2016. Photo credit AP
In the wake of a fuel economy cheating scandal that has actually rocked the Japanese automotive industry, Nissan will certainly take a 34 percent regulating stake in Mitsubishi Motors, the two companies announced today.
Nissan will certainly invest 237 billion yen, concerning $2.2 billion, to come to be Mitsubishi Motors’ largest shareholder, reports Automotive News.
The publication reports Mitsubishi and Nissan will certainly authorize an agreement on Might 25 where Nissan can easily name four directors to Mitsubishi Motors’ board.
Reuters reports that the 2 companies will certainly now discuss and jointly produce technology, and collaborate on ordering and plant utilization.
In various other words. it does not look most likely at present that the Mitsubishi brand will certainly merely cease to exist or be forever enveloped by Nissan. Here’s just what Nissan CEO Carlos Ghosn said:
Ghosn said the alliance would certainly cover purchasing, common platforms, joint manufacturing, technology progression and target shared expense savings. Nissan would certainly additionally contribute corporate governance and management knowledge to advice Mitsubishi restore public trust in its brand.
“It represents a win-win,” Ghosn said. “We believe in the potential of Mitsubishi Motors.”
[…] “We are not heading to modification Mitsubishi. Mitsubishi is heading to modification by itself,” Ghosn said. “We are heading to sustain Mitsubishi to do that.”
The deal comes mere weeks after Mitsubishi Motors—the carmaking division of Japanese manufacturing giant Mitsubishi Hefty Industries—conceded that it had been cheating on fuel economy examinations for years by altering tire pressures on its microcars. And it was Nissan, its companion in that microcar venture, that caught Mitsubishi in the act. Fuel economy was overstated by as considerably as 10 percent on some models.
This week Mitsubishi announced that it Might have actually been cheating fuel economy examinations with all its Japanese-market cars, widening a scandal most likely to have actually huge financial and legal ramifications—however one that is so much just restricted to the Japanese market.
Since then, sales of the essential microcars have actually plummeted, as have actually Mitsubishi’s stock prices.
So just what does Nissan have actually to obtain by taking regulate of this beleaguered company? A lot more compared to you could think. Despite Mitsubishi’s well-documented struggles in the North American market, it’s a hugely successful automaker in various other places, namely Southeast Asia, where as Automotive News concedes Nissan has actually failed to obtain considerably traction. Mitsubishi could additionally advice Nissan strike Brand-new sales volumes.
There’s additionally the lucrative microcar partnership in between the 2 companies in Japan, and the honest truth that the two companies can easily pool resources on electrification.
And Mitsubishi Motors, of course, receives a badly-required infusion of money from a considerably bigger automaker.
More to come on this making story.