Mitsubishi is all set to become the newest member of the ever growing Renault-Nissan Alliance as Nissan is set to acquire 34% stake in the struggling Japanese automaker. Mitsubishi landed in trouble for falsifying fuel economy figures of its models in Japan and the deal is expected to give it the much needed support to recover from the scandal.
The transaction which will make Nissan the largest stakeholder of Mitsubishi is subject to approval by the latter’s shareholders as well as a regulatory approval. While Mitsubishi will receive financial stability, Nissan gets the largest stake for an attractive price. Renault-Nissan Alliance CEO Carlos Ghosn described the deal as a “breakthrough transaction and a win-win” for both entities.
Nissan and Mitsubishi will extend the already existing partnership. Both parties will realize synergies when it comes to sharing platforms, technology and purchasing. The inclusion of Mitsubishi makes the Alliance big enough to be compared with the giants like GM and Toyota. The strengthened Alliance is expected to produce 9.5 million vehicles a year.
Nisan could gain access to Mitsubishi’s sales network in South East Asian markets like Malaysia, Thailand and Indonesia where Japanese brands are favored. Once the approvals are in place, the Nissan-Mitsubishi deal is expected to be completed towards the end of this year.