Nissan formally takes control of Mitsubishi
Nissan finally completed its purchase of a controlling stake in Mitsubishi on Oct 20th, for 237 billion-yen ($2.29 billion), aiming to boost its scale and take on world’s leading automakers.
Nissan finally completed its purchase of a controlling stake in Mitsubishi on Oct 20th, for 237 billion-yen ($2.29 billion), aiming to boost its scale and take on the world's leading automakers.
The $2 billion bought 34% of Mitsubishi's stake, and also unleashed a cascade of executive changes. Carlos Ghosn, chief executive of both Renault SA and Nissan, will be taking the chairman's role at Mitsubishi. He has appointed three other Nissan executives to a downsized 11-member Mitsubishi board, and also dispatched its pillar executive Trevor Mann as Mitsubishi's new chief operating officer. Mann will leave his post as chief performance officer at Nissan.
"With the addition of Mitsubishi, the 17-year-old alliance between Nissan and Renault SA produces around 10 million vehicles a year, making it one of the three largest automotive groups in the world, behind Toyota Motor Corp. and Volkswagen AG. The alliance will have a scale advantage over most car makers and a handicap to none." said Mr. Ghosn, according to Wall Street Journal.
Earlier this year, Mitsubishi was embroiled in falsification scandal, it later admitted that it faked fuel economy test data for its cars to make emissions levels look more favorable. And it wasn't the first time that the Japanese carmaker gets involved in controversies. In 2000, Mitsubishi revealed it covered up safety records and customer complaints. Four years later, it admitted to its broader automobile problems that were decades ago, leading to Japan's worst automotive recall scandal at that time.
"The fact that Mitsubishi had many problems like this in the past means that the management did not go to the root causes, did not understand exactly what was behind this kind of behavior and, in consequence, it repeated," Ghosn said, according to CNBC.
"That's why I will be insisting to make sure that we go to the root causes of the problem and obviously bring significant solution in order for this to never repeat in the future."
"We are a full member of the Renault-Nissan alliance from today," former Mitsubishi Chairman and President Osamu Masuko said last Thursday in Tokyo, although Masuko has relinquished his chairman title, Ghosn asked him to stay in the Mitsubishi president position.
"We look forward to learning a lot of things from Nissan. We intend to accelerate our progress and come as close as possible to where Nissan is today," he said. "The investment by Nissan Motor will certainly contribute significantly to our company's sustainable growth."
With the alliance, Nissan and Mitsubishi has outlined plans to reap combined savings of 49 billion yen ($473.2 million) in the next fiscal year through joint manufacturing, product sharing, combined purchasing and other combined operations that spread costs over a higher volume of vehicles.