There is some breaking news coming from Japan. According to latest updates, Nissan has taken a 40% controlling stake in Mitsubishi Motors in a deal worth $2.2 billion. This move has made Nissan the single biggest shareholder, bigger than even the Mitsubishi Heavy Industries, which is the parent company of Mitsubishi Motors. MHI now owns only 20% of Mitsubishi Motors.
Mitsubishi was in some hot waters lately after it revealed that the Japan’s sixth largest automaker has been lying about the fuel efficiency of four of its domestic model for last 25 years. Before that, there was another scandal claiming that Mitsubishi has been covering up customer complaints (2004). Mitsubishi has been hurting as a company, and there was a constant drain of manpower. Employees have been leaving the company after its 2004 scandal.
When the fuel consumption scandal broke out on 19th of April, Mitsubishi’s stock plummeted 43%, and orders for new cars fell to astonishing 51%. Osamu Masuko, CEO of Mitsubishi Motors, told the press that the company was looking to solve the issue on its own without involving other companies from Mitsubishi Group.
Interestingly, Nissan was the one that brought Mitsubishi’s fuel consumption cheating scandal in front of the Japanese government. There is a rumor that it was Nissan’s plan along. It brought the scandal to light so that it can take over the company after its value in the market has fallen considerably. But that is all hearsay, and there are no confirmed reports yet.
The move will definitely benefit Nissan. Nissan has been borrowing kei cars from Mitsubishi, along with Suzuki, for a long time now. And after taking over the company, Nissan will be able to get its hands over Mitsubishi’s kei car expertise.
That is some major piece of news. And it is the second major consolidation of such kind from the Japanese automakers. Before that, Mazda and Toyota joined hands into a technology sharing partnership. Japanese automobile giants are moving, let’s wait and see how the landscape will be when the dust settles.