October 21, 2016 7:00 am JST

Nissan-Mitsubishi focuses on green tech and Southeast Asia

Nissan's Ghosn and Mitsubishi's Masuko meet the press in Tokyo on Oct. 20.

TOKYO -- Nissan Motor seems to view green-vehicle technologies and a stepped-up presence in Southeast Asia as fruits of its new partnership with Mitsubishi Motors.

Nissan on Thursday purchased 34% of Mitsubishi's outstanding shares for 237 billion yen ($2.27 billion), effectively rescuing the smaller automaker from a fuel-economy scandal that came to light in April.

Annual sales at the two automakers and Nissan's long-standing French partner Renault total 10 million units or so. The partners aim to capitalize on economies of scale in procurement and production to slash costs and sharpen their game in a harsh competitive landscape.

In green technologies, Nissan and Renault seek to cash in on Mitsubishi Motors' plug-in hybrid technologies cultivated via the Outlander sport utility vehicle. Carlos Ghosn, CEO of the Nissan-Renault alliance, who will also become chairman of Mitsubishi Motors, told reporters Thursday that being able to use the fellow Japanese automaker's technology as a basis for development is beneficial. As plug-in-hybrid sales increase, parts procurement costs will drop and profitability rise. The collaboration will give Nissan the ability to expand its Earth-friendly offerings beyond its Leaf electric vehicle.

Mitsubishi Motors, for its part, will gain access to Nissan's strength in autonomous driving, as showcased in the new Serena minivan.

Global expansion will center on the key Southeast Asian market. Mitsubishi Motors will supply Nissan with multipurpose vehicles built at an Indonesian plant to open next year -- under an original equipment manufacturer arrangement. Mitsubishi Motors is highly competitive in pickup trucks in Southeast Asia. Nissan has yet to cultivate this region so it now plans to play catch-up.

To raise the operating rate of Mitsubishi Motors' Mizushima plant in Okayama Prefecture, where the company produces minicars affected by the mileage scandal, Nissan's drivetrain parts also will be made there.

Platform development will be another area of collaboration.

Myriad possibilities

Ghosn told The Nikkei in an exclusive interview that scale is key to the pursuit of cutting-edge technologies. Welcoming Mitsubishi Motors to the Nissan-Renault alliance will bring major financial and technological advantages, he claimed.

Ghosn talked about his meeting with Mitsubishi Motors Chairman and President Osamu Masuko. "Masuko-san mentioned ... that he may ask Renault to provide diesel engines to Mitsubishi," Ghosn said, adding that such a move would benefit both automakers.

"Obviously when it comes to purchasing, in particular purchasing in Europe or purchasing in Brazil or purchasing in [other] countries where Renault is present, there will be a lot of synergies," he said.

Ghosn also touched on the possibility of Renault offering products or platforms to Mitsubishi for use in the North American market, where Renault is not present, calling such an arrangement "a win-win."

Separately, Nissan will promote Chief Competitive Officer Hiroto Saikawa to co-CEO. Saikawa will be counted on to make key decisions when Ghosn is busy, Ghosn said.

Mitsubishi Motors stock rose for a second straight day Thursday, ending up 3% at a roughly four-month high of 536 yen. On Wednesday, the stock soared 11% at one point on the news that Ghosn would become chairman.

(Nikkei)

Nissan Motor Co., Ltd.

Japan

Market(Ticker): TKS(7201)
Sector:
Industry:
Consumer Durables
Motor Vehicles
Market cap(USD): 40,445.24M
Shares: 4,282.71M

Mitsubishi Motors Corp.

Japan

Market(Ticker): TKS(7211)
Sector:
Industry:
Consumer Durables
Motor Vehicles
Market cap(USD): 7,154.92M
Shares: 1,490.28M

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