The even larger Renault-Nissan Aliiance will build over 10 million vehicles a year.

The Renault-Nissan Alliance can now officially count one more member because Mitsubishi Motors is finally a member in the partnership. As part of the $2.3 billion deal, Nissan gets a 34 percent stake in its Japanese rival. Carlos Ghosn will also become Chairman of the Board at Mitsubishi, which will fit well with his identical roles at Renault and Nissan.

“The expanded Alliance will be one of the largest automotive groups in the world, with annual sales of 10 million units in fiscal year 2016,” Ghosn said in the announcement that officially confirmed the deal.

The partnership will mean access to new resources for Mitsubishi Motors. The Alliance’s brands have the advantage of cost reductions by purchasing materials together, sharing factories, and joint technology development. Down the road, look for Mitsubishi to use the same vehicle platforms as the other members, too. According to Automotive News Europe, Mitsubishi’s plug-in hybrid system will arrive in vehicles from the other brands.

In addition to Ghosn’s role as chairman, three other Nissan employees will join Mitsubishi Motor’s board, according to Automotive News Europe. Trevor Mann will also become Mitsubishi’s Chief Operating Officer by moving from his current position as Chief Performance Officer of Nissan. Mitsubishi CEO Osamu Masuko will remain in that position.

Nissan and Mitsubishi Motors initially announced this partnership in May, and they’ve spent the last several months ironing out the details. The motivation for the purchase came in April when Mitsubishi admitted that it falsified fuel economy data for some minicars in Japan. Later, the company confessed the cheating went back to 1991. The scandal caused the stock to plunge, and Nissan was an obvious ally because the two automakers already had an alliance for supplying these tiny vehicles.

The new cooperation could be what Mitsubishi Motors needs to accelerate growth in the U.S because Nissan’s deeper pockets might allow bringing some fresh products. The automaker has been showing strength in America recently. For example, sales in 2015 were up 22.8 percent. Through September 2016, deliveries have nudged up 1.5 percent.

Source: Mitsubishi, Automotive News Europe

 

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Mitsubishi Motors Joins Renault-Nissan Alliance


MMC to receive strategic, operational and management support from Nissan
Synergy benefits to enhance MMC profit margins and earnings per share
Carlos Ghosn, Nissan chairman and CEO, named chairman-elect of MMC
New role created of Director for Global Risk Control

Tokyo , October 20 , 2016 – Mitsubishi Motors Corporation (MMC) announces that Nissan Motor Co., Ltd. (Nissan) has become its largest shareholder after completing the purchase of 34% of MMC-issued stock for 237 billion JPY.

As part of Nissan's strategic investment, MMC will become a full member of the 17-year strong global alliance between Nissan and Renault – paving the way for synergies to enhance profit margins and earnings per share.

Nissan Chairman and Chief Executive Officer Carlos Ghosn has been nominated to become chairman of the Board. Ghosn will be joined by three other Nissan nominated directors, including Mitsuhiko Yamashita, Nissan's former executive vice president of research and development, who joined MMC earlier this year as head of development. The other nominees are Hitoshi Kawaguchi, Nissan chief sustainability officer and head of global external affairs, and Hiroshi Karube, Nissan global controller and global asset manager.

MMC President and Chief Executive Officer Osamu Masuko requested that Nissan also provide a senior executive to join the company's executive committee to bolster MMC's management. Trevor Mann, currently Chief Performance Officer of Nissan, will become Chief Operating Officer of MMC.

"I welcome Nissan's willingness to provide strategic, operational and management support as our new lead shareholder," said Masuko. "As part of our Board and management team, Nissan will help us to rebuild customer trust in our company and maximize potential future synergies through our deeper alliance."

MMC will appoint a new role of director for global risk control to report directly to the chief executive officer, who will oversee compliance and risk control. This director will regularly report to the board on moves to enhance governance at MMC.

The three largest institutional shareholders in MMC – Mitsubishi Heavy Industries, Mitsubishi Corporation and The Bank of Tokyo-Mitsubishi UFJ – have welcomed Nissan's investment and pledged their support for its board nominees. Moving forward, these three Mitsubishi institutional shareholders together with Nissan will maintain a more than 51 percent of the share capital.

Nissan and MMC will begin cooperating on a wide-ranging synergy program, building on a five-year alliance in minicars between the two companies.

The two companies have identified a number of valuable synergies in areas including:

- Joint purchasing cost-reduction
- Deeper localization in operations around the world
- Joint plant utilization
- Common vehicle platforms
- 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.

The partnership is expected to generate significant recurring synergies for MMC, equivalent to a 1 percentage point increase in operating profit margin in fiscal year 2017, 2 percentage points in fiscal year 2018, and more than 2 percentage points in fiscal year 2019. The projected synergies are also forecasted to enhance MMC earnings per share in fiscal year 2017 by 12 yen per share, and by 20 yen per share in fiscal year 2018.

Ghosn said: "The expanded Alliance will be one of the largest automotive groups in the world, with annual sales of 10 million units in fiscal year 2016. The addition of Mitsubishi Motors will build on the entrepreneurial spirit and management cooperation that has characterized our alliance with Renault for 17 years. I am confident this will benefit all stakeholders."

About Mitsubishi Motors Corporation (MMC)
MMC is a Japanese automobile company which has a competitive edge in light trucks (pick-up trucks and SUVs) and in the ASEAN region. The company launched the first mass-produced electric vehicle in 2009, which was followed with a plug-in hybrid EV-based crossover in 2013. MMC, which has 30,000 employees, has a global footprint and has production facilities in Japan, Thailand, China, The Philippines and Russia. Models such as the Pajero Sport, Triton and Outlander play a major role in achieving its growth. Global sales volume in fiscal year 2015 was 1,048,000 units. MMC's net sales and net income for fiscal year 2015 were 2,267.8 billion yen and 89.1 billion yen respectively. MMC is listed on the Tokyo Stock Exchange.