Nissans Chief Executive Offer (CEO), Carlos Ghosn is going for more than 34% of the Mitsubishi Motors market to acquire the control of the mini car models that are crucial to its Japan sale. It will sell alost 237.4 billion yen ($2.2 billion) in share to Nissan. Going for a huge piece of Mitsubishi Motors also gives Nissan more prominent exposure to Thailand and other Southeast Asia countries. After three decades, in 2012, it revived low-cost brand Datsun.
The purchase of some shares of Mitsubishi by Nissan, which is already one of the leading car development and manufacturing with Mitsubishi, could change the course of Japanese auto industry, which at the moment is made by eight different car makers. Nissan collaboration with Mitsubishi Motor shall build economies of scale and will build synergies in few parts including platform sharing, sports vehicles pickup trucks and in some other markets like the Southeast Asia, Ghosn said with the Mistubishi Motors Chairman Osamu Masuko in Yokahama, Japan.
We believe we can realize billions of dollars in one time and continuing synergies by working closely together, Ghosn said. We are determined to preserve and nurture the Mitsubishi brand, and we will help this company to address the challenges it faces, particularly in restoring consumer trust in its fuel-economy performance.
Both of the Heads, Ghosn and Masuko admitted that the two companies had talks in the past years on the decision of deepening the partnership, with the following events increasing the process. Both of the titan companies have decided to sign an agreement on 25th of May in which Nissaan can proudly announce the new four directors to Mitsubishi Motors board, which shall also include the Chairman/CEO. The deal will go un-noticed if not completed within a whole year.
Nissan dropped 1.4% to close at 988,1 yen in Tokyo Trading. Mitsubishi Motors has risen 16%, which is the biggest gain in the span of three years. The stock did not trade the whole day because the buyers outnumbered the sellers by a Margen of 34 to 1. The Tokyo Stock Exchange gave a free hand to the matching requirement at the closing auction, allowing the amound of 2.6 million shares changed their hands at 575 yen per share.
Mitsubishi Motor has enough money to tackle the costs related to the cheating scandal, Chairman Masuko said. The company doesn’tt foresee any financial shortage as a result, he said. Nine models in which includes an SUV may have not been properly tested.
Under the Mitsubishi and Nissan partnership, Mitsubishi has successfully designed and developed some very new mini cars with 0.6 liter engines for the Japanese economy. These mini cars were sold under the brand name of both Mitsubishi and Nissan, but the sales have been stopped since April due to the fuel economy problem of these cars.
Mitsubishi Chairman Osamu Masuko on Wednesday said in a news conference that his company wants to continue working with Nissan. He also continued saying that his company has more than sufficient cash at the present time to control the costs associated with the fuel economy problem.
