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Nissan set to take over Mitsubishi Motors


Reports are streaming in that Nissan is in talks about taking a 34 percent stake in the now scandal-hit Mitsubishi Motors.

The deal is a lifeline for Mitsubishi Motors, which is caught up in its third scandal in two decades.

As for the latest scandal surrounding Mitsubishi, well, last month, the company admitted overstating the fuel economy on at least four of its models – mini-cars sold in Japan, including two sold under Nissan's badge. That has hit Mitsubishi, badly, wiping $3 billion off its value and bruising a brand already losing market share, as investors fret over potential compensation costs.

The partnership should also be a boost for Nissan - Japan's number-two carmaker - which has struggled to make inroads into Asia, outside of China, in countries like Thailand and the Philippines, where Mitsubishi's models are popular. Mitsubishi and Nissan already cooperate on development and manufacturing with a partnership dating back to 2011.

The biggest benefit to Nissan would be Mitsubishi's presence in Southeast Asia. Mitsubishi has strong brand recognition in the region, while Nissan has been less successful at establishing a presence. Nissan will however also face the much tougher task of ensuring a turnaround at Mitsubishi, without full control.

Will Nissan take full control of the company or could we see another partnership coming in to save Mitsubishi? We’ll keep you posted as things unfold.

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