Inking a deal worth ¥237 billion (about $2.1-billion USD), Nissan announced today their extended partnership with Mitsubishi Motors Corporation in the wake of recent fuel economy cheating perpetrated by Mitsubishi. This massive purchase comes right after Mitsubishi’s stock, affected by this newest scandal, hit rock bottom.
Here’s the headline: “YOKOHAMA and TOKYO, Japan – Nissan Motor Co., Ltd., (“Nissan”), and Mitsubishi Motors Corporation, (“MMC”) announced that they have signed a Basic Agreement today to form a far-reaching strategic alliance between the two Japanese automakers.”
Carlos Ghosn, chief executive and president of Nissan, said, “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. We will be the largest shareholder of MMC, respecting their brand, their history and boosting their growth prospects. We will support MMC as they address their challenges and welcome them as the newest member of our enlarged Alliance family.” – – Nissan Motor Co., Ltd
This agreement outlines cooperation with building common vehicle platforms, purchasing, joint manufacturing plant use, growing markets together and technology sharing. This agreement gives Nissan Motor Co., Ltd a majority share in MMC where expanded employee changes are sure to take place.
“MMC and Nissan expect Mitsubishi Heavy Industries, Mitsubishi Corporation and The Bank of Tokyo – Mitsubishi UFJ to maintain a significant collective ownership stake in Mitsubishi Motors, and to support the strategic alliance.” – – Nissan Motor Co., Ltd
Strategically, this gives Nissan an opportunity to gain large market share with small vehicles in the Far East. The agreement also saves Mitsubishi from their downward spiral. Many experts believed that this recent scandal would finish MMC, but the new deal between the two Japanese automakers comes just in time.
More to come.