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  • Nissan Purchases Controlling Stake in Mitsubishi Motors

Nissan Purchases Controlling Stake in Mitsubishi Motors

Companies Forge “Strategic Alliance” In Face of Fuel Economy Scandal

May 12, 2016
Troubled Japanese automaker Mitsubishi Motors Corporation agreed to a partnership with Nissan Motor Co., Ltd., parent company of Nissan USA. Under the terms of the basic agreement signed by both companies today, Nissan will take a 34 percent controlling stake of Mitsubishi for 237 billion yen, or $2.2 billion.
Nissan’s massive infusion of cash will help Mitsubishi weather the fallout stemming from a recent fuel economy scandal. The company recently admitted cheating on fuel economy tests for some of its Japanese-market subcompact cars, leading the company’s stock to fall more than 20 percent mere days after the scandal came to light.
Nissan CEO Carlos Ghosn said the deal would be a win-win for both Nissan and Mitsubishi, bringing the latter under the umbrella that also shelters Infiniti and Datsun. “We will be the largest shareholder of MMC, respecting their brand, their history and boosting their growth prospects,” Ghosn said. “We will support MMC as they address their challenges and welcome them as the newest member of our enlarged Alliance family.”
Photo 2/4   |   2006 Mitsubishi Montero Left Front 1
So what will that mean for American truck consumers? Not much, probably. The models Mitsubishi sells here are unaffected by the gas-mileage scandal, and Nissan and Mitsu don’t go toe-to-toe in many segments here. However, Nissan could make inroads by licensing Mitsubishi’s all-wheel-drive technologies, and there’s a chance corporate platform sharing could result in a Frontier-based Mitsubishi pickup or small SUV (we have our fingers crossed for a rugged Montero redux).
Globally, the effects will be further reaching. Mitsubishi has a great reputation in many Latin American and Asian markets, while Nissan’s focus is on Europe, Japan, and North America. As such, it’s fair to assume both companies will borrow from the other’s expertise to expand product competition in each respective region.
The deal isn’t finalized yet, as a definitive alliance agreement must first be signed. Current Mitsubishi Motors shareholders must agree, meaning Nissan needs the blessing of Mitsubishi Heavy Industries, the Mitsubishi Corporation, and the Bank of Tokyo – Mitsubishi UFJ. Neither Mitsubishi Motors nor Nissan expect any protests.
Source: Nissan Motor Co., Ltd.; Mitsubishi Motors Corporation; New York Times