Nissan Just Took Over Mitsubishi

Nissan and Mitsubishi have officially joined forces to share technology, vehicle platforms and more.

These two Japanese automakers have signed a basic agreement to, according to the official press release, form a “far-reaching strategic alliance,” though they’ve already collaborated in various ways for five years.

The cornerstone of this business deal is Nissan taking a 34 percent equity stake in the triple-diamond brand, a move that’s valued at 237 billion yen, about $2.1 billion. This deal will make Nissan the largest shareholder in Mitsubishi Motors.

These automakers will partner in areas including purchasing, vehicle platforms, technology sharing and joint manufacturing-plant utilization, among other things. This union could dramatically reduce costs for both companies. Pressure from global competitors, government regulation, currency-exchange rates and an ever-escalating technology arms race are pushing car companies to the financial limit.

SEE ALSO: Japan’s Auto Industry Could Consolidate to Just Three Brands by 2021

This deal will be sealed when a definitive alliance agreement is signed, something that’s expected to take place by the end of this month.

Carlos Ghosn, president and CEO of Nissan called his latest conquest a “breakthrough transaction and a win-win for both Nissan and Mitsubishi Motors.” However, time will tell if this is true.

Nissan has been tied-up with French automaker Renault for 17 years and that deal has borne limited fruit. It’s hard to imagine how a deal with Mitsubishi will help Nissan, especially given the former company’s disastrous position in North America.

Discuss this story on our Nissan Forum