UPDATE, May 12, 7pm AEST: The two car makers have now confirmed a tie-up that will see Nissan take a 34 per cent stake in Mitsubishi. Common vehicle platforms, technology sharing, and joint factory utilisation will be involved. More to come.
Nissan is reportedly close to a deal that would see it, effectively, take control of struggling Japanese car maker Mitsubishi Motors.
According to sources that have spoken to Japanese news service NHK, the two auto makers are in final stages of negotiations, with board meetings scheduled on both sides for today.
The plan, which is still to be confirmed, would see Nissan invest 200 billion yen ($2.5 billion) in Mitsubishi Motors. In return, it would gain around 34 per cent of the smaller brand’s stock, as well as effective control of the struggling marque.
Above: Nissan Dayz Roox.
Mitsubishi Motors has been reeling since the middle of April this year when it admitted that it had illegally overstated the fuel economy of the Japanese-market eK, eK Space, Nissan Dayz, and Nissan Dayz Roox kei cars.
Analysts who have spoken to business paper Reuters believe that Mitsubishi Motors may be on the hook for around $1.4 billion in compensation to customers who bought the affected eK and Nissan Dayz models.
Despite its problems, Mitsubishi Motors’ CEO, Osamu Masuko, told a press conference yesterday that “we haven’t approached our sister companies for financial support”.
The car maker has around $5.5 billion in cash, low levels of debts, and believes that it can “manage the issue”.
Above: Mitsubishi eK Space.
By NHK’s calculations, a Renault-Nissan-Mitsubishi alliance would have global sales of over 9.5 million cars per year. That places it not too far behind last year’s top three automakers: Toyota with 10.15 million sales, the Volkswagen Group’s 9.93 million vehicle sales, and GM’s 9.83 million cars and trucks.
Mitsubishi Motors’ share price is currently down around 43 percent. At the time of writing, each Mitsubishi Motors share is worth 495 yen ($6.15), compared to 865 yen ($10.75) before the company confirmed its dodgy domestic market fuel economy numbers.
Nissan and Mitsubishi Motors already enjoy a close relationship, with the two swapping badges on various models in overseas markets. Prior to the fuel economy scandal, Nissan sold the Mitsubishi eK and eK Space as the Dayz and Dayz Roox.