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Nissan buys a third of Mitsubishi Motors

May 12, 2016

Japanese carmaker Nissan has conformed it'll buy a large stake in scandal-plagued domestic rival Mitsubishi Motors. For Nissan, the investment is above all meant to increase its clout in the small-car market.

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Image: picture-alliance/dpa

Nissan and Mitsubishi enter strategic alliance

Nissan on Thursday threw a lifeline to Mitsubishi Motors by confirming plans to buy a 34-percent stake in the scandal-hit rival, who's in the middle of attempts to manage its fuel economy cheating fiasco.

According to a regulatory filing, the deal is valued at about $2.2 billion (1.93 billion euros) and effectively grants Nissan large-scale controlling rights.

The two companies have already been cooperating on development and manufacturing in a partnership dating back to 2011, but that deal has not involved any cross-sharing.

Synergy effects

"With little prospect of growth in the domestic car market, Nissan probably wants to get more involved in smaller vehicles, given expectations of a surge in emerging markets," T&D Asset Management analyst Kioshi Yamanaka told Reuters.

"The biggest benefit to Nissan would be Mitsubishi's presence in Southeast Asia," Advanced Research Japan analyst Koji Endo added.

Mitsubishi has strong brand recognition in Thailand, Indonesia and the Philippines, while Nissan has been less successful at establishing a presence in these fast-growing markets for smaller cars.

hg/cjc (dpa, Reuters, AFP)