Nissan to buy a third of Mitsubishi
NISSAN MOTOR Co is investing 237 billion yen (US$2.2 billion) to take a 34 per cent stake in scandal-ridden Mitsubishi Motors Corp in what Nissan chief Carlos Ghosn said is a win-win deal intended to repeat the success of his Nissan-Renault alliance.
Ghosn appeared with Mitsubishi Motors Chairman Osamu Masuko at a hastily called joint news conference on Thursday in Yokohama, where Nissan is headquartered. Under the deal, Nissan becomes the top investor in Mitsubishi Motors. Mitsubishi group companies - Mitsubishi Heavy Industries, trading company Mitsubishi Corp and the Bank of Tokyo-Mitsubishi UFJ - will continue to hold stakes in the automaker, but they have agreed to support the alliance with Nissan, both sides said.
Mitsubishi Motors has been rocked recently by a scandal over cheating to inflate mileage for minicar models. Reporters peppered Ghosn with questions about whether he was worried the scandal may 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 sizable synergies," said Ghosn, the Brazilian-born Frenchman who engineered Nissan's alliance with Renault which began in 1999.
REWARDS OVER RISK
Adding Mitsubishi will be a plus in sharing platforms, purchasing and technology and Nissan will benefit from its strengths in southeast Asia, Ghosn said. The automakers will maintain separate identities, brands and dealerships, Ghosn and Masuko said.
Under the deal, Nissan will purchase 506.6 million newly issued Mitsubishi Motors shares for 468.52 yen a share. The deal is still subject to a formal signing of an agreement, as well as regulators' and shareholders' approvals, but is expected to close by the end of the year. Nissan nominees, including chairman of the board, will join the board at Mitsubishi Motors.
When asked whether partnering with a company prone to fraud might be risky, Ghosn said he trusted Masuko.
"Obviously, the problem is very serious; we don't take it lightly. At the same time there are solutions, not only to respond to this problem but also to avoid these kinds of problems," Ghosn told The Associated Press after the news conference.
"And we think Masuko-san, from the beginning, has been very transparent with us, looking very authentically into why this is happening, how it could happen, how can we limit this into the future," he said, using the Japanese honorific "san" to refer to Masuko.
Masuko apologised for the scandal and welcomed the alliance with Nissan.
"This agreement will create long-term value needed for our two companies to progress towards the future," he said.
Tokyo-based Mitsubishi Motors, which makes the Outlander sport utility vehicle and the i-MiEV electric car, acknowledged last month that it had systematically falsified mileage data for its eK wagon and eK Space light passenger cars, which were produced for Nissan as the Nissan Dayz and Dayz Roox.
It is common for a manufacturer to sell a product made by another company under its own brand.
The scandal surfaced after Nissan did its own mileage tests and raised questions. Nissan does not have minicars in its line-up and placing Mitsubishi under its group umbrella is one solution.