Nissan Motors is close to buying an important stake in Mitsubishi Motors and becoming their biggest shareholder.
It seems that Nissan is getting ready to exploit Mitsubishi’s current predicament triggered by the manipulation of fuel-consumption data. Both automakers have confirmed that are in some advanced talks over a tie-up, following many recent reports that have suggested the move. “Nissan and Mitsubishi are discussing various matters including capital cooperation, but nothing has been decided,” the two Japanese automakers said, adding that the matter is to be discussed by their boards on Thursday. According to some sources, Mitsubishi has already approved the deal and it is now up to Nissan if it concludes.
The same sources said that the agreement was worth around 1.8 billion dollars for a 34-percent stake in Mitsubishi, thus making Nissan the largest shareholder in scandal-hit automaker. Since the manipulation-disclosures emerged in April, Mitsubishi’s market value plunged by around 42 percent, the equivalent of a 3-billion-dollar loss. The costs of such a scheme have been estimated by analysts to hit close to 1 billion dollars, as the automaker will likely be forced to compensate affected customers.
Nissan’s strategy is well directed, as it would increase its market share on domestic grounds, especially in the minicar segment, but it would expand its presence in the emerging markets as well, such as Thailand, Indonesia and the Philippines.