Nissan to Take Stake in Mitsubishi Motors

Amidst the recent controversy surrounding Mitsubishi and their misreported fuel efficiencies, Nissan has taken the opportunity to pick up a substantial stake in the Japanese automaker at a very attractive price. The deal will be worth an estimated $2.2 billion dollars, and will give Nissan a 34% stake in Mitsubishi. The companies view this as a win-win for both sides, as Mitsubishi will now have access to to Nissan’s technology and research and development programmes, as well as much needed stability. For Nissan, they will now have market hold in areas where Mitsubishi has been successful, such as  Malaysia, Thailand and Indonesia.

Considering the larger picture, the moves now give Nissan the ability to produce about 9.5 million cars, which puts them among the ranks of GM, Toyota, and other giants in the industry. Additionally, the move was announced as  Nissan reported a 14.5% rise in net profit to $4.4 billion since last March. Nissan sights, “Encouraging demand for new models, combined with continued cost efficiency, helped us withstand currency headwinds and volatile trading conditions in several emerging markets.”

In my opinion, the move may save Mitsubishi from bankruptcy. Prior to the deal, I was convinced the end was near for Mitsubishi, yet things may be even better than before for the automaker now. I agree that this is a win-win for both sides, and it will be interesting to see if they are able to compete with Toyota and GM for equivalent market shares across the globe. _86442205_nissansign

Link: http://www.bbc.com/news/business-36273122

3 comments to Nissan to Take Stake in Mitsubishi Motors

  • manleya18

    In what ways do you think Mitsubishi/Nissan will try to re-build its customer base and the trust that it lost during the past few months? Do you think that connecting Mitsubishi to Nissan will boost the brand, or will Mitsubishi have to make a more pointed effort to regain trust?

  • adamsm19

    This deal is certainly a boon for Mitsubishi due to the stability provided by Nissan. That being said, it will be interesting to see if this deal pays off for Nissan in the long run. While Mitsubishi does have significant market share in Thailand and Indonesia, the brand has been severely tarnished by recent scandals and I am not convinced that Nissan will be able to overcome the negative perception of the brand.

  • Barrett Snyder

    I think in the eyes of the public this will highly benefit the public perception of Mitsubishi. Nothing is more reassuring than to see a brand acquired by a company that holds strong market position and a positive reputation. While Nissan may not be the biggest baddest Asian brand out there, they are a major competitor and are relatively free from the types of scandal that have been affecting Mitsubishi as of late. That alone is enough to sway some people’s opinion more favorably towards Mitsubishi’s reputation. However, will it be enough?

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