Leading car manufacturer, Nissan, is to take a 34% share in Mitsubishi Motors, following a deal worth $2.2bn (approx £1.37bn). Nissan made the move as its fellow Japanese vehicle manufacturer took a hit with consumers over the fuel efficiency scandal last year. The part-acquisition makes Nissan the largest share-holder in the business â exceeding previous holder of the top spot, Mitsubishi Heavy Industries.
Carlos Ghosn, Chief Executive of both Nissan and Renault said that one of the greatest challenges that Mitsubishi faces is restoring faith with customers and the venture would go some way to doing so. Osamu Masuko, Chief Executive of Mitsubishi Motors echoed his views.
Mitsubishi experienced a significant slump in sales after news of the scandal broke last month. It was revealed that some of the firmâs employees had inflated rates of fuel efficiency by as much as 10% on four, different models of petrol vehicles in a bid to close deals with customers. Just yesterday, it stated that a further nine more models were affected â putting its entire range under new scrutiny. The OEM later admitted that procedures of fuel efficiency testing used had not been compliant since 1991.
Since news of the scandal came to light, Mitsubishiâs share price has fallen by 43%. Long-standing partner and new investor Nissan also took a hit with a drop of 1.6%.
Whilst itâs been described as risky move by some business analysts who note that it could have a detrimental effect of Nissanâs own reputation, many have cited the joining of the two as a new opportunity for growth. As OEMs are encouraged to pool resources in order to keep abreast of the emergence of telematics and autonomous driving technologies, this latest merger could well be the making of he two firms.
And, of course, itâs well-known that both Nissan and Mitsubishi remain key players in the alternative fuel market thus the feeling is very much, Watch this space.