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Nissan takes control of Mitsubishi

By raccars Published


Mitsubishi will be part of the Renault-Nissan Alliance, the world's third largest car group.

The acquisition of Mitsubishi by Nissan has been completed and the Renault-Nissan Alliance is now the third largest car manufacturing group in the world based upon numbers sold.

Nissan bought a 34 per cent stake in its ailing rival, making it the largest shareholder after the investment of around £1.5 billion (237 billion yen). The European Commission approved the acquisition earlier this month after consideration in the context of EU Merger Regulations.

Carlos Ghosn is now the CEO of Mitsubishi and Nissan and the troubled Japanese brand will join the Renault-Nissan Alliance. The EU Commission said that the acquisition would not raise competition concerns as there would still be other strong players active in the car markets after the merger and there were only limited overlaps between the activities of Nissan and Mitsubishi.

Nissan takes on Mitsubishi's 'challenges'

Ghosn welcomed Mitsubishi Motors to the ‘enlarged alliance family’ and said that Mitsubishi would be supported in addressing its challenges. He added that the deal was a breakthrough transaction, creating a win-win situation for Mitsubishi and Nissan.

He promised that the ‘dynamic new force’ created by the merger would result in significant synergies and intensive cooperation. Osama Masuko, Mitsubishi’s chief executive, meanwhile, said that it would not be easy for the company to regain public trust after its test data scandal but that the Nissan merger would mark a start towards addressing this challenging task.

The two brands have previously collaborated on various models and are set to sign the new share agreement within a fortnight. Before the deal, Mitsubishi had admitted to falsifying test data on as many as 13 different models over a period which started in 1991.

UK cars not affected

All of the vehicles were only sold in Japan and the firm issued a letter addressing owners of Mitsubishi-made cars in Britain to reassure them that their vehicles are not affected by the recent fuel economy scandal.

Mitsubishi has also said, however, that the falsified figures are actually so close to the legitimate ones that the affected cars will continue to be sold, although the company has not revealed which specific vehicles are affected.

Masuko said that the company is still looking at the issues surrounding the scandal and that more concrete details would be submitted to the transport ministry in Japan by May 18, 2017. Mitsubishi has previously told the US EPA (Environmental Protection Agency) that US-spec Mitsubishis conform to fuel test procedure legislation.

Investigations continue

Mitsubishi share prices fell by 50 per cent after the scandal broke and Japanese orders for the brand’s cars halved over a matter of days. An independent committee was assembled to investigate the company, headed by Keiichi Watanabe, who is a former Tokyo High Prosecutor's Office superintending prosecutor.

Last month Mitsubishi Motors announced that the committee would be reviewing data and documents and interviewing everyone suspected of having an involvement in the falsification of the data. The committee was also tasked with coming up with measures to stop any recurrence of similar issues in the future.

Japanese media has previously reported that, together with 625,000 cars sold in Japan, other models affected could include the electric i-MiEV, which is available to buy in the UK. Mitsubishi is adamant that only cars sold in Japan are affected, however.

News of the debacle first broke in mid-April when Mitsubishi admitted that fuel test rigging affected 625,000 cars, including some produced for Nissan. The models which were initially named were all superminis and so-called ‘kei’ cars; the Nissan Dayz, the Nissan Dayz Roox, the Mitsubishi eK Space and the eK Wagon. ‘Kei’ cars are models with compact dimensions and small-capacity engines.

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