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Business

Mitsubishi Motors, Nissan to team up on Southeast Asian distribution

Seeking mutual savings in product procurement and vehicle delivery

JAKARTA -- Mitsubishi Motors plans to begin merging distribution operations in Southeast Asia with those of controlling shareholder Nissan Motor, reducing transport costs for parts and vehicles in a show of group synergy.

The duo will join forces in Thailand on delivering finished vehicles to vendors, as well as transporting parts. Mitsubishi Motors has a Chonburi Province plant with an annual capacity of 420,000 units. The facility sits near a port, allowing for efficient importing and exporting of vehicles and parts. This convenience will help move components for Nissan factories more efficiently as well.

Mitsubishi Motors also began production in February at a new plant in the Philippine province of Laguna. Nissan, which outsources car production in that country to local companies, is considering switching to a joint delivery system with its smaller Japanese peer to deliver Nissan vehicles to sellers.

Production also kicks off Tuesday at a new Mitsubishi Motors factory in the Indonesian province of West Java. From fall, the company plans to build seven-seater multipurpose vehicles there for supply to Nissan under an original equipment manufacturer agreement. The companies intend to cooperate on distributing finished vehicles to sellers here as well.

Nissan took a 34% stake in Mitsubishi Motors last October as the latter reeled from its fuel economy falsification scandal. The companies intend to produce concrete results quickly with their distribution and procurement link-ups and aim to spread the methods they hit on in Southeast Asia to other regions, including Australia and the West. Mitsubishi Motors hopes to reap 40 billion yen ($364 million) a year from synergies starting in fiscal 2018, while Nissan is aiming for 60 billion yen.

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