Yokahoma: Hit by a scandal over falsified fuel economy data, crisis-ridden Mitsubishi Motors has some help at hand from its Japanese rival. Auto-maker Nissan Motor Co. said Thursday it would spend 237.4 billion yen (approximately Rs 14,648 crore) to acquire a 34 per cent stake in Mitsubishi Motors Corp.
The deal will catapult Nissan as the controlling shareholder of Mitsubishi which was looking out for outside capital to wade through the crisis. The 34 per cent share acquisition will now position Nissan as the majority stakeholder in the company. Nissan is already in a vehicle-development and manufacturing partnership with Mitsubishi. The current deal, which Nissan expects to be finalsed by May 25, will make Nissan a 42.29 per cent shareholder in the company, a Financial Times report said, citing company data.
Nissan will get representation on the Mitsubishi Motors board proportional to its stake, and the chairman of Mitsubishi Motors will be a Nissan nominee under the planned agreement, Nissan said.
“Nissan is determined to preserve and nurture the Mitsubishi Motors brand. We will help this company address the challenges it faces, particularly restoring consumer trust in the fuel-economy performance,” Nissan Chief Executive Carlos Ghosn said at a news conference with his Mitsubishi counterpart in Yokohama.
The company’s sales at home have seen a major slump since the disclosure that some employees at Mitsubishi overstated fuel efficiency by up to 10 per cent on four types of petrol-powered small cars sold in Japan, including two models built for Nissan and sold under its brand.
Mitsubishi has since admitted that it has been using fuel economy testing methods that were not compliant with Japanese standards since 1991. On Wednesday, the company said nine more models were affected, extending the scandal’s scope to the entire line-up of its cars sold in Japan.
“It will not be easy to restore trust. With Nissan, we will start moving towards that goal,” said Osamu Masuko, chief executive of Mitsubishi Motors, on Thursday.
The misconduct came to light last year after Nissan, Mitsubishi’s partner in mini-cars since 2011, became aware of discrepancies in fuel-efficiency data as the two companies were developing a new slate of vehicles. In December, Nissan called for a joint investigation, which was carried out in February.
Since Mitsubishi’s admission on April 20, its shares have fallen 43 per cent.