Nissan Bails Out Mitsubishi
CARS.COM — Nissan has stepped in to rescue struggling Mitsubishi Motors, the companies announced today. Nissan will pay about $2.2 billion for a more than 34 percent stake, which gives it control of Mitsubishi under Japanese law.
Mitsubishi has been reeling since its admission last month that it cheated on mileage testing for its Japanese-market cars. Some of those cars also are sold there under the Nissan brand, and the two companies have maintained a product development alliance for five years.
Related: Report: EPA Orders Tests of Mitsubishi Cars
Nissan said in a statement that the companies now would cooperate “in areas including purchasing, common vehicle platforms, technology-sharing, joint plant utilization and growth markets.”
Mitsubishi Motors’ future was in doubt, with the potential costs of the cheating scandal mounting and its share price cut nearly in half. That means Nissan is gaining control of its partner at a relative bargain.
Nissan CEO Carlos Ghosn told a joint press conference in Yokohama, Japan, where the deal was announced that this would result in large savings for both companies, but that Mitsubishi would retain a separate identity, according to a Reuters report.
“We are determined to preserve and nurture the Mitsubishi Motors brand. We will help this company address the challenges it faces, particularly in restoring consumer trust in its fuel economy performance,” Ghosn said.
What does the deal mean for U.S. shoppers? That’s unclear. Since Mitsubishi sells few vehicles here, the two companies could decide there isn’t a business case for a separate Mitsubishi operation. A request for comment from Nissan in the U.S. was not immediately answered.
As for the mileage-test rigging, Mitsubishi told Cars.com in April that the cheating was on models for Japan. It said it was investigating, but was not aware of any U.S. models affected.
The deal has echoes of the rescue of Nissan itself in 1999 by Ghosn and France’s Renault, creating the Renault-Nissan Alliance. Renault now owns more than 40 percent of Nissan, while Nissan has a stake in Renault and Ghosn heads both. Nissan said today’s deal will give it seats on the Mitsubishi board “in proportion to their voting rights” and the right to name the chairman, which could put Ghosn at the head of a third company.
With Mitsubishi included, the expanded alliance would have combined annual sales of more than 9 million, putting it in a league with the industry’s largest companies. The alliance also protects Nissan’s minicar supply for Japan and will give it more presence in Southeast Asia where Mitsubishi has a stronger identity and production plants.
