Nissan to buy 34% of Mitsubishi

Nissan to buy 34% of Mitsubishi, declares FY 2015/16 net earnings surged 14.5% y/y THU 12 MAY 2016 - Nissan's earnings in financial year (FY) 2015/16 were primarily driven by strong sales in North America, Western Europe, and China, combined with the benefits of cost-reduction efforts and improvements in model mix.

By YOKO KUBOTA and SEAN MCLAIN Updated May 12, 2016 9:35 a.m. ET 12 COMMENTS YOKOHAMA, Japan— Nissan Motor Co. said Thursday that it would bet more than $2 billion that Mitsubishi Motors Corp. can recover from a scandal involving falsified fuel-economy data.

In return, Nissan will get a controlling 34% stake in the struggling auto maker that has admitted to manipulating data to inflate mileage results for some of its cars.

The deal is the latest example of car makers working together in an increasingly competitive industry. By teaming up, rivals hope to slash steep development costs and jointly invest in the new technology necessary to meet tightening emission standards and fend off challenges from Silicon Valley upstarts.

WSJ Article

For Carlos Ghosn, chairman and chief executive of the Renault-Nissan Alliance, the investment is a vote of confidence in Osamu Masuko, his counterpart at Mitsubishi Motors.

Hopefully they have the balls to reinstate the Evo.
Don't know what Mitsu was thinking, chopping out their only distinctive offering like that.
(Disclaimer: biased as an Evo owner)

Time to rebrand Mitsubishi as Datsun, they will instantly be 34% better.

I feel like Nissan over the past 10 years has shifted to an upscale automotive manufacturer. Many of their vehicles are $40K+ save their economy offerings like the Sentra and Juke. Acquiring Mitsubishi may be a calculated move to provide a lower end product line and create brand division among their offerings. Regardless, this is all very interesting.

P.S. - Wouldn't it be funny to see an Evo re-branded as a Sentra SE-R... Just thinking out loud.

Sounds like the Mitsubishi keiretsu wants to get out of the car and truck business.

In general I do not like modern Nissans. I've been less than impressed with them as rental cars and don't think there is any scenario where I would consider buying a new one in the near future, but I do give them credit for being actual cars. Mitsubishi (with the exception of the Evo) hasn't made anything in a long time that I've even remotely been interested in and then when I wanted an AWD turbo boost buggy, I went wit a WRX and didn't even seriously consider an Evo because Mitsubishi and my bias against them. So, to me this is a perfect marriage of two companies that I can continue to ignore.

From a us market view this may be a dumb idea. However Mitsubishi still sells good vehicles all over the world.

The Aussie Pajero is awesome.

Type Q wrote: Sounds like the Mitsubishi keiretsu wants to get out of the car and truck business.

Exactly what I was thinking...the successful part of the company wants to amputate the gangrenous limb that is holding them back. THis venture with Nissan is the pre-op procedure that preps the limb for removal.

The majority of the car and truck business was sold by Mitsu Heavy years ago, I never realized they with the finance arm bought it back from DailmerBenz.

So they are just printing stocks to get them below the majority share holder range.

Mitsubishi really REALLY doesn't want to do cars anymore.

More proof that Nissan has absolutely no idea what they're doing, IMHO.

I think it's a total coup. Gives Nissan wider access to sales/distribution/manufacturing, particularly in the SE Asia market where Mitsubishi has traditionally been much more successful. Nissan may not be a company for GRM-types to fawn after anymore but Ghosn sure is doing a fantastic job of transforming them into a ruthless business machine.

pointofdeparture wrote: I think it's a total coup. Gives Nissan wider access to sales/distribution/manufacturing, particularly in the SE Asia market where Mitsubishi has traditionally been much more successful. Nissan may not be a company for GRM-types to fawn after anymore but Ghosn sure is doing a fantastic job of transforming them into a ruthless business machine.

I agree. Just because Mitsu is a non-entity in the US these days, doesn't mean it doesn't have value, especially in a lot of emerging markets. Gohsn is all about empire-building, and he got Mitsu for a song after the whole fuel economy scandal tanked their stock.

Coming from a very large company which has recently purchased a struggling, smaller competitor, the opportune time to purchase is when the value is down. I think their timing is ideal if they can now turn it around and use the Mistubishi brand name and the Nissan IP to make the product great.

1988RedT2 wrote: More proof that Nissan has absolutely no idea what they're doing, IMHO.

Just in case you didn't realize the Renault deal proved it.

Type Q wrote: Sounds like the Mitsubishi keiretsu wants to get out of the car and truck business.

That is what I'm thinking too... kind of strange bedfellows considering who the overarching parent companies/company groups are.

Given that I consider Nissan to be the Dodge of Japan (would that make Mitsu == Plymouth?), it's pretty par for a match.

From a business perspective, it means that Nissan can reopen the Normal, IL plant if desired. Nissan would also gain a factory in Venezuela and supplement manufacturing in Brazil and the South Pacific. Given that Mitsubishi plants are almost entirely in Nissan-occupied regions, supply lines can be consolidated at minimal expense (and possibly as a net gain). All Nissan needs to do is determine the value of the Mitsu brand, cut down on models, and retool as needed.

As terrible as it sounds, I think it would be smart to kill Mitsubishi as a brand because it allows Nissan to more cleanly end support for their existing vehicles and free up production for future vehicles/parts. This only makes sense if Nissan thinks it could sell more cars if it made more cars.

What'll really happen? NISMO Eclipse.

What's this about a Renault Alliance?

Nissan bought 34% of Mistu? So that cost them, what, $34?

Nissubushi? Mitssan?

Dang. I forgot the Renault aspect...

So the new Evo will have a CVT?

Kylini wrote: Given that I consider Nissan to be the Dodge of Japan (would that make Mitsu == Plymouth?), it's pretty par for a match. From a business perspective, it means that Nissan can reopen the Normal, IL plant if desired. Nissan would also gain a factory in Venezuela and supplement manufacturing in Brazil and the South Pacific. Given that Mitsubishi plants are almost entirely in Nissan-occupied regions, supply lines can be consolidated at minimal expense (and possibly as a net gain). All Nissan needs to do is determine the value of the Mitsu brand, cut down on models, and retool as needed. As terrible as it sounds, I think it would be smart to kill Mitsubishi as a brand because it allows Nissan to more cleanly end support for their existing vehicles and free up production for future vehicles/parts. This only makes sense if Nissan thinks it could sell more cars if it made more cars. What'll really happen? NISMO Eclipse.

Mitsubishi is the Dodge of Japan.......Nissan is the dumbed down version of AMC.

I'm still awaiting Suzuki to get on board with this as well so all three can finally go out of business with each other.

1988RedT2 wrote: More proof that Nissan has absolutely no idea what they're doing, IMHO.

QFT

It will be interesting to see what the Renault/Nissan/Mitsubishi brand can do as they are simply doing what everyone else in big industry is doing in acquisitions. There is literally nowhere to put your money save enormous internal expansions or M&A. The internal spend can't be stomached by the shareholders as the return is typically not adequate. The Acquisitions (while overpriced currently) are the only way to grow cost effectively...

WOW Really Paul? wrote: I'm still awaiting Suzuki to get on board with this as well so all three can finally go out of business with each other.

Suzuki is kicking ass in Japan, FWIW

The WSJ article said it well. The acquisition made sense as Mitsubishi had good market penetration where Nissan and Renault didn't. So instead of building their brand there they are just buying a well known and established brand that has a positive view in that part of the world.

In reply to Flight Service:

It was more meant for here.....Mitsu is a dying brand here, Suzuki is dead, and with Nissan's track record, I'm astonished they've managed to swindle enough people to maintain their existence.