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Nissan, Mitsubishi get closer

2010-12-15 08:25

CLOSER TIES: Nissan president and CEO Carlos Ghosn (left) and Mitsubishi president Osamu Masuko addressing a joint press conference in Tokyo, Japan, on December 14, 2010.

Nissan and Mitsubishi said they would deepen their operational ties to make better use of their resources as a strong yen makes competing tougher for Japanese automakers.

Nissan and Mitsubishi, Japan's No.3 and No.6 automakers in 2009, have been working together since 2003, mainly involving Mitsubishi Motors' building 660cc min-ivehicles under the Nissan badge in Japan.

Automakers around the world are seeking operational partnerships to save costs by sharing vehicle platforms and components. Nissan and its 43% owner Renault, joined hands early in 2010 with Daimler to share vehicles and engines with the maker of Mercedes-Benz cars.


As yen strength persists and domestic sales contract, Japanese automakers are losing money producing vehicles at home and are looking for ways to trim costs, including shifting at least some production to lower-cost markets overseas.

But they are also under political pressure to protect jobs at home and keep factories in Japan open.

Under the new agreement, Nissan will provide a light van to Mitsubishi for the Japanese market, while Mitsubishi will supply an SUV to Nissan for sale in the Middle East, they said.

Discussions are also under way for the production of Nissan's Navara bakkie at Mitsubishi's Thailand factory and for the establishment of a 50/50 joint venture to develop and produce 660cc mini-vehicles for Japan.

Nissan said it was also considering providing Mitsubishi Motors with higher-end models in Japan.

"This agreement is important for Nissan as it supports our expansion in emerging markets, meets immediate needs overseas, and enables us to grow our minicar business in Japan," Nissan CEO Carlos Ghosn told a joint news conference with his Mitsubishi counterpart, Osamu Masuko.

"In the global auto industry, cooperation on specific projects among automakers is becoming increasingly common. It is a signal of how our industry is evolving to sustain success over the long term," Ghosn said.


Both presidents said they were not considering a capital tie-up, but added they would continue to look for more opportunities for co-operation.

Toyota has also said it would enter the min-ivehicle segment, which is unique to Japan and accounts for 35 percent of the shrinking market.

To reduce costs, Nissan has already started to import the March sub-compact (the Micra in South Africa) sold in Japan from Thailand this year, while Mitsubishi plans to do the same with its "Global Small" car to be built in the south-east Asian nation from 2012.

Mitsubishi's Masuko has promised to announce a new mid-term business plan by the end of December, 2010, to outline the company's growth strategy over the next few years.

Mitsubishi Motors is burdened with factories in the US and the Netherlands that are severely under-used.

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