Carlos Ghosn, the man who helped pull Nissan Motor Co back from the brink 16 years ago, is taking on a new salvage job: Mitsubishi Motors Corp.
Nissan agreed to buy a 34% stake in Mitsubishi Motors for about 237.4 billion yen ($3 billion), the automakers said Thursday.
The capital infusion could prove a crucial lifeline to Mitsubishi Motors, whose market value had fallen more than 40% after saying it overstated the fuel economy of its minicars and had been improperly testing Japan models since 1991.
The purchase will make Nissan the top shareholder in Japan's smallest automaker at a discount. Further collaboration between the two would deepen an existing partnership that already involves joint manufacturing and vehicle development - and represent another step toward a much-needed realignment of Japan's crowded car industry.
"It's a bargain deal for Nissan, though of course there are risks," Koji Endo, an analyst with Advanced Research Japan, said by phone. "This deal would create a win-win situation for all stakeholders including Mitsubishi group and the government, which wants to protect jobs."
The deal comes as Mitsubishi Motors grapples with a serious hit to its reputation, declining sales and the potential for billions of dollars in costs from the scandal involving the fuel mileage performance of four minicar models, two of which are supplied to Nissan.
After suspending deliveries of the affected models for the last two weeks of April, Nissan reported a 51% plunge in its monthly minicar sales.
"We obviously care about the viability of the company," Mr Ghosn, Nissan's chief executive officer, said in an interview. If Mitsubishi Motors isn't healthy, "we have a problem. Then, we have no kei cars for the Japanese market."
Mr Ghosn, 62, already has a track record for shaking up Japan's auto industry. Taking over as Nissan's president in 2000, he brought the then-struggling company company back from the brink by breaking up its so-called keiretsu network of suppliers, shutting plants and leveraging an alliance with Renault SA.
In coming to Mitsubishi Motors' aid, the challenges ahead for Ghosn extend beyond getting minicars back on the market. The company has said nine more models may have been improperly tested in Japan, after initially disclosing that it had overstated the fuel economy of its minicars by as much as 10%.
Japan's jam-packed auto industry faces increasing outlays to compete in an era where electrification, autonomous-driving technology and ride-sharing upstarts are on the rise.
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Nissan agreed to buy a 34% stake in Mitsubishi Motors for about 237.4 billion yen ($3 billion), the automakers said Thursday.
The capital infusion could prove a crucial lifeline to Mitsubishi Motors, whose market value had fallen more than 40% after saying it overstated the fuel economy of its minicars and had been improperly testing Japan models since 1991.
The purchase will make Nissan the top shareholder in Japan's smallest automaker at a discount. Further collaboration between the two would deepen an existing partnership that already involves joint manufacturing and vehicle development - and represent another step toward a much-needed realignment of Japan's crowded car industry.
"It's a bargain deal for Nissan, though of course there are risks," Koji Endo, an analyst with Advanced Research Japan, said by phone. "This deal would create a win-win situation for all stakeholders including Mitsubishi group and the government, which wants to protect jobs."
The deal comes as Mitsubishi Motors grapples with a serious hit to its reputation, declining sales and the potential for billions of dollars in costs from the scandal involving the fuel mileage performance of four minicar models, two of which are supplied to Nissan.
After suspending deliveries of the affected models for the last two weeks of April, Nissan reported a 51% plunge in its monthly minicar sales.
"We obviously care about the viability of the company," Mr Ghosn, Nissan's chief executive officer, said in an interview. If Mitsubishi Motors isn't healthy, "we have a problem. Then, we have no kei cars for the Japanese market."
Mr Ghosn, 62, already has a track record for shaking up Japan's auto industry. Taking over as Nissan's president in 2000, he brought the then-struggling company company back from the brink by breaking up its so-called keiretsu network of suppliers, shutting plants and leveraging an alliance with Renault SA.
In coming to Mitsubishi Motors' aid, the challenges ahead for Ghosn extend beyond getting minicars back on the market. The company has said nine more models may have been improperly tested in Japan, after initially disclosing that it had overstated the fuel economy of its minicars by as much as 10%.
Japan's jam-packed auto industry faces increasing outlays to compete in an era where electrification, autonomous-driving technology and ride-sharing upstarts are on the rise.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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