News - Mitsubishi
Nissan acquires large stake in Mitsubishi Motors
Mitsubishi to join Renault-Nissan alliance after 34 per cent stake purchase
21 Oct 2016
NISSAN chairman and CEO Carlos Ghosn has announced the purchase of a 34 per cent stake in Mitsubishi Motors Corporation (MMC) by Nissan Motor Co, making Nissan its largest shareholder.
The news was made official after the decision to purchase the stake, worth 237 billion yen (A$2.981b), was announced in May this year, shortly after Mitsubishi admitted it had manipulated the fuel economy figures of more than 625,000 Mitsubishi and Nissan-badged mini cars in Japan.
The addition of Mitsubishi to the Renault-Nissan alliance will make it the third-largest automotive group in the world by global volume, with projected sales of 10 million units in the 2016 Japanese fiscal year.
Mr Ghosn will take up the role of chairman of the board and will be joined by three other directors nominated by Nissan – MMC head of development Mitsuhiko Yamashita, Nissan chief sustainability officer and head of global external affairs Hitoshi Kawaguchi – as well as Nissan global controller and global asset manager Hiroshi Karube.
Mitsubishi chief competitive officer Hiroto Saikawa has been elevated to co-CEO, while Nissan chief performance officer Trevor Mann has been promoted to COO of MMC.
Mitsubishi and Nissan have collaborated for the past five years on Japanese domestic market (JDM) mini cars, and the two companies have already identified a number of areas in which their collaboration will be mutually beneficial including joint purchasing, deeper localisation, joint plant utilisation, common vehicle platforms, technology sharing and the expansion of the companies’ combined presence in emerging markets.
Mr Ghosn has predicted that merging these areas could result in savings of 24 billion yen (A$302m) in the 2017 Japanese fiscal year and 60 billion yen (A$755m) in 2018 and beyond.
One potential shared vehicle platform could be for the next-generation Navara and Triton pick-ups, with Mr Ghosn saying in May that it was “very possible” the two vehicles would have common underpinnings in the future, citing lower production costs as a reason.
Mr Ghosn said he was excited at the possibilities that would come with combining the brands.
“The combination of Nissan, Mitsubishi Motors and Renault will create a new force in global car-making,” he said.
“It will be one of the world's 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.”
Meanwhile, MMC has announced it has revised its financial forecasts for the fiscal year ending March 31, 2017, saying it expects to record “an extraordinary loss” in that period of time, citing factors such as a delay in recovery of emerging markets’ sales volume, revisions to exchange rates, additional costs on quality measures and impairment loss at its Mizushima plant.
Net sales have been revised to be 3.7 per cent lower, or 70 billion yen (A$881m), operating income is down 53 billion yen (A$667m), and basic income per net share is down 65.5 per cent, or 96.6 yen (A$1.22) per share.
It also stands to take a net income loss of 220 billion yen (A$2.77b) due to its improper conduct in fuel economy testing.
MMC will release its financial results for the first half of the 2016 fiscal year on October 28.
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