Already announced back in May, this news should no longer surprise. But if you’re a fan of cars in general—and of Mitsubishi or Nissan in particular—you might still find it surreal that the erstwhile fierce rivals (at least in our market) are now stablemates after Nissan formally completed on October 20 its purchase of a 34% equity stake in Mitsubishi Motors.
The stake—big enough to give Nissan control over its fellow Japanese automaker—is said to be worth 237 billion yen. That’s $2.28 billion (or P110 billion in our currency). No loose change, obviously. What this kind of money buys is an alliance that could finally break into the world’s top three automotive groups in terms of “global volumes.” This alliance now counts Nissan, Mitsubishi and French car firm Renault as members. Together, they are projected to deliver 10 million sold units in 2016.
Currently, the top three car companies in terms of total sales are Volkswagen, Toyota and General Motors.
The sound bites coming from the two companies’ top honchos unequivocally show which one takes top billing in this game-changing transaction.
“The combination of Nissan, Mitsubishi Motors and Renault will create a new force in global car-making,” said Nissan chairman and CEO Carlos Ghosn. “It will be one of the world’s three largest automotive groups, with the economies of scale, breakthrough technologies and manufacturing capabilities to produce vehicles to serve customer demand in every market segment and in every geographic market around the world.”
“I welcome Nissan’s willingness to provide strategic, operational and management support as our new lead shareholder,” countered MMC president and CEO Osamu Masuko. “As part of our board and management team, Nissan will help us rebuild customer trust in our company and maximize potential future synergies through our deeper alliance.”
That management support comes in the form of Ghosn himself, who is expected to now also serve as chairman of Mitsubishi Motors’ board. He will be joined by three Nissan executives as board directors: Mitsuhiko Yamashita, Nissan’s former executive vice president of research and development (and now MMC’s head of development); Hitoshi Kawaguchi, Nissan’s chief sustainability officer and head of global external affairs; and Hiroshi Karube, Nissan’s global controller and global asset manager. That’s a lot of corporate muscle.
This level of executive power tells us Nissan isn’t treating the new partnership with an ounce of levity. It means business, and failure is not even a remote option. Which is good news for Mitsubishi, if you think about it.
According to Mitsubishi, the two companies will focus on the following: joint purchasing cost reduction; deeper localization in global operations; joint plant utilization; platform sharing; technology sharing; cooperation in emerging and developed markets; and “the use of the Nissan Sales Finance Company to serve MMC customers in any market where mutually beneficial.”
In our market, an executive of Mitsubishi Motors Philippines has told Fast Times that Nissan officers have begun visiting MMPC’S offices and checking on the latter’s dealership facilities. For now, no changes are seen to be effected as far as the separate operations of MMPC and Nissan Philippines are concerned.
Back in May, Ghosn told media that Nissan would benefit from Mitsubishi’s plug-in hybrid technology. “This is good for Nissan,” he declared at the time. “We can leverage their platform, reducing our technology development costs, and Mitsubishi can increase scale, which will decrease their development costs.”
Let’s hope Mitsubishi Motors’ new chairman will be in the mood to revive the Lancer Evolution, perhaps the most desirable model in Mitsubishi’s product lineup.