Japanese carmaker Nissan is taking a 34 percent stake in its smaller, scandal-hit rival Mitsubishi, paying the equivalent of 1.93 billion euros.
The deal is a lifeline for Mitsubishi which has seen its shares almost halve in value after admitting overstating fuel economy figures for some of its models.
Nissan Chief Executive Carlos Ghosn said the two would now share and jointly develop technology, and save “billions” through synergies: “At Nissan, we are determined to preserve and nurture the Mitsubishi Motors brand, and we will help this company address the challenges it faces, particularly in restoring consumer trust in its fuel economy performance.”
Ghosn said he’d been “reassured” by Mitsubishi’s Chief Executive Osamu Masuko over the size and scope of the fuel economy scandal.
Masuko said: “I believe this capital alliance will be appreciated by the consumers, business partners, shareholders, employees, and every stake holder who was concerned.”
He added: “It is not an easy task to regain trust, so through the alliance with Nissan, we will be starting a path towards tackling this difficult task.”
The plus for Nissan – Japan’s second-largest carmaker – is that Mitsubishi is popular in Southeast Asian countries like Thailand and the Philippines, where Nissan has struggled.
Nissan, its alliance partner Renault, and Mitsubishi combined would have annual sales of 9.3 million vehicles, near industry leaders Toyota and Volkswagen.