Nissan Acquires Controlling Stake In Mitsubishi Motors Corporation

Earlier this year, Nissan announced that it is working on a deal to invest heavily in its Japanese counterpart Mitsubishi Motors Corporation (MMC). That deal has now gone through with Nissan, Japan’s second largest automobile manufacturer, agreeing to invest 237 billion yen (approximately $2.29 billion US dollars) to revive the struggling automaker's fortune, who was also found guilty of a mileage cheating scandal. With this funding, Nissan becomes the largest single-party shareholder in MMC at 34 per cent.

The trio alliance of Nissan, Renault and MMC will become one of the three largest automotive groups in the world. The partnership will not only help MMC to get itself out of its embattled state, but will also help all three in joint purchasing, deeper localisation, joint plant utilisation, common vehicle platforms, technology-sharing and working towards expansion of the companies’ combined presence throughout the world.

Carlos Ghosn, CEO and chairman of the Nissan-Renault alliance, will take charge of MMC board. Osamu Masuko will remain MMC’s president and CEO, despite being under a lot of scrutiny by some shareholders on the mileage cheating scam that surfaced earlier this year.

While addressing a joint briefing session, Ghosn said, “One of the reasons that I so much wanted Mr. Masuko to stay as CEO was because I wanted the people at Mitsubishi to know that Mitsubishi will remain Mitsubishi. Mitsubishi will not become a subsidiary of Nissan. This sends a strong message that it’s not Nissan that’s going to transform Mitsubishi, it’s Mitsubishi that’s going to transform Mitsubishi.”

In India, Nissan and Renault are jointly working together to create a market space for themselves. Both the companies share one common production facility, based out of Chennai, and common car platforms to keep the costs in check. With Mitsubishi joining the alliance, the ‘three-red-diamonds’ is bound to receive an overhaul in its strategy to capture an emerging auto market like India. While Mitsubishi currently sells only two cars in India, the Montero and the Pajero Sport, it is bound to focus on more mainstream car segments in the coming years.