Nissan Motor Co is taking a 34 percent stake in scandal-ridden Mitsubishi Motors Corp in what Nissan chief executive officer Carlos Ghosn said is “a win-win” deal that aims to repeat the success of his Nissan-Renault alliance.
Ghosn appeared with Mitsubishi Motors chairman Osamu Masuko in a hastily called joint conference yesterday in Yokohama, Japan, where Nissan is headquartered. Ghosn said Nissan would invest ¥237 billion (US$2.2 billion) to become the top investor in Mitsubishi Motors.
Mitsubishi group companies — Mitsubishi Heavy Industries, trading company Mitsubishi Corp and the Bank of Tokyo-Mitsubishi UFJ — are to continue to hold stakes in the automaker, but they have agreed to support the alliance with Nissan, both sides said.
Mitsubishi Motors has recently been rocked by a scandal over cheating on mileage tests to inflate mileage for minicar models and reporters peppered Ghosn with questions on whether he was worried that the scandal might grow.
“This is a breakthrough transaction and a win-win for both Nissan and Mitsubishi Motors. It creates a dynamic new force in the automotive industry that will cooperate intensively and generate sizeable synergies,” said Ghosn, who engineered Nissan’s alliance with Renault, which began in 1999.
Mitsubishi would be a plus in sharing platforms, purchasing and technology, and Nissan would benefit from its strengths in Southeast Asia, Ghosn added. He said he has a close relationship with Masuko and they have a good relationship built on trust.
The automakers are to maintain separate identities, brands and dealerships, Ghosn and Masuko said.
Under the deal, Nissan is to purchase 506.6 million newly issued Mitsubishi Motors shares for ¥468.52 per share. The deal is still subject to a formal signing of an agreement, regulators’ and shareholders’ approvals, but is expected to close by the end of the year.
Masuko apologized for the scandal, but welcomed the alliance with Nissan.
“This agreement will create long-term value needed for our two companies to progress toward the future,” he said.
Tokyo-based Mitsubishi Motors, which makes the Outlander sport utility vehicle and the i-MiEV electric car, last month said that it had systematically falsified mileage data on its eK wagon and eK Space light passenger cars, which were produced for Nissan as the Nissan Dayz and Dayz Roox.
Nissan, which makes the March subcompact, Infinti luxury models and Leaf electric car, is to face a major challenge in repairing Mitsubishi’s tarnished reputation and winning back consumer trust. Mitsubishi said the rigging dates back 25 years and might involve all its models, including discontinued ones.
Ghosn has saved Nissan from near-bankruptcy, imposing cost cuts that have been more efficient, if not brutal, than old-style Japanese management, which relies on cautious, harmonious decisionmaking by committee and vaguely defined responsibilities.
Mitsubishi had an unsuccessful partnership involving foreign management with DaimlerChrysler AG in 2000 that failed to reverse Mitsubishi’s debts and lagging sales. The collaboration gradually unraveled, ending after about five years.
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