Mitsubishi deal opens doors, but some challenges arise image

Before Nissan takes advantage of its new partner, it first needs to restore Mitsubishi’s image struck by the fuel-economy readings manipulation scandal.

While Nissan will definitely improve its market position through its new acquisition, CEO Carlos Ghosn has some work to do. Restoring customers’ confidence is not an easy task, but it has to be a priority for Nissan ahead of further expansion plans. Right after announcing the 2.2-billion-dollar investment for a 34 percent stake in Mitsubishi, Ghosn said “the biggest challenge is to support Mitsubishi changing itself and growing and being profitable and restoring its reputation,” adding that winning customers lies first and foremost on Mitsubishi’s back, but the CEO will have to step up front and help with the process. The deal is a huge one for the Renault-Nissan alliance, as it adds another 1 million units in sales to the overall figure of the world’s fourth-largest automaker. But most importantly, it gives access to new segments and markets where Nissan is lagging and to technical platforms, allowing the company to develop more profitable models such as pickups and SUVs.

But there is a long way ahead, with Mitsubishi facing costly fines and compensation claims from customers. The following day of the agreement announcement, the Japanese’s authorities raided Mitsubishi Motors’ headquarters in Tokyo after allegations that a manager at the company ordered the cheating at a subsidiary that handles fuel economy testing. Nissan is also under scrutiny, after it was accused by South Korea’s environment ministry of using an emissions bypass software for the diesel Qashqais crossover sold in the country.