Nissan announced last month it has completed its acquisition of a 34% equity stake in Mitsubishi Motors becoming the brands largest shareholder.
In May of this year, Nissan Motor Co. said it would spend Yen 237.4 billion (US$2.2 billion) to take a 34% stake in Mitsubishi Motors Corp., becoming the controlling shareholder after a scandal at Mitsubishi involving falsified fuel-economy data.
Mitsubishi was found guilty in a mileage-cheating scandal, which has caused a rapid decline in its sales globally. The Lancer-maker had admitted, that it indeed cheated in the mileage tests of cars for several decades now; distorting the mileage numbers to camouflage them as fuel efficient machines. Mitsubishi isnt new to scandals; in 2000, it had covered up for several safety mishaps of its automobiles.
The deal sees Mitsubishi (MMC) join the global alliance with Nissan and Renault making the organization one of the top three automotive groups, after Toyota and Volkswagen AG, by global volumes in the world with sales of 10 million units in fiscal year 2016.
Nissan chairman and CEO Carlos Ghosn will now become the chairman of Mitsubishi Motors
Ghosn announced Nissan and MMC would collaborate on joint purchasing, deeper localization, joint plant utilization, common vehicle platforms, technology-sharing and an expansion of the companies combined presence in both developed and emerging markets.
The combination of Nissan, Mitsubishi Motors and Renault will create a new force in global car-making, Ghosn said in a release. It will be one of the worlds three largest automotive groups, with the economies of scale, breakthrough technologies and manufacturing capabilities to produce vehicles to serve customer demand in every market segment and in every geographic market around the world.
Nissan offered its assistance at the request of Osamu Masuko, president and chief executive officer of MMC, following the companys fuel economy crisis. The two companies have cooperated on kei-cars* for the Japanese market over the past five years.
We are committed to assisting Mitsubishi Motors as it rebuilds customer trust. This is a priority as we pursue the synergies and growth potential of our enlarged relationship.
*Kei car, K-car, or kei jidosha, literally "light automobile" is a Japanese category of small vehicles, including passenger cars, microvans, and pickup trucks (all 660 cc or less). They are designed to comply with Japanese government tax and insurance regulations, and in most rural areas are exempted from the requirement to certify that adequate parking is available for the vehicle. This especially advantaged class of cars was developed to popularize motorization in the postwar era. While successful in Japan, the genre is generally too specialized and too small to be profitable in export markets.
