Nissan Motor Co. completed its acquisition of a $2.3 billion stake in Mitsubishi Motors Corp., clearing the way for Carlos Ghosn to take over as chairman of a scandal-plagued partner and embark on his bid to turn around a third major automaker.
Ghosn, already chairman at Nissan and Renault SA, will share the role of Nissan CEO for the first time as he takes the helm of Mitsubishi Motors. The two Japanese carmakers agreed to share plug-in hybrid and autonomous-driving technology, finance company resources and a multipurpose vehicle model for Southeast Asian markets.
Nissan is coming to the rescue of Mitsubishi Motors after its admissions to improperly measuring fuel economy and manipulating test data. A push toward electrification and autonomous-driving technology is leading smaller carmakers to join with bigger rivals to share resources and save costs, exemplified by Suzuki Motor Corp.’s talks to form an alliance with Toyota Motor Corp.
“With time, we are going to develop much more synergy,” Ghosn said at a press conference Thursday with Osamu Masuko, who will remain Mitsubishi Motors’ president. “What we see today is low-hanging fruit.”
Hiroto Saikawa, Nissan’s chief competitive officer, will become co-CEO along with Ghosn, 62.
Mitsubishi Motors sees the alliance with Nissan leading to 25 billion yen ($240.47 million) in synergies for the fiscal year ending in March, Masuko said. Nissan estimates 60 billion yen ($577.18 million) in savings next fiscal year, Ghosn said at a separate press briefing Thursday in Tokyo.
A Renault-Nissan-Mitsubishi alliance creates the world’s fourth-largest auto group, after Toyota, Volkswagen AG and General Motors Co. Ghosn and three Nissan executives will join the board of Mitsubishi Motors. Nissan Chief Performance Officer Trevor Mann will become the chief operating officer at Mitsubishi Motors, which will also name a risk control chief.
Masuko wanted to leave his job to take responsibility for Mitsubishi Motors’ fuel economy wrongdoings, which include improper testing going as far back as 1991, according to Ghosn, who said he asked his counterpart to stay.
“Ghosn and Masuko have developed a sense of trust,” said Koji Endo, a Tokyo-based auto analyst at SBI Securities Co. “Ghosn will need Masuko in that position to coordinate with his restructuring job. That’s better than finding a new guy that he hasn’t worked with before.”
Nissan paid 468.52 yen ($4.51) per share for about 34% of its outstanding stock, Mitsubishi Motors said in a statement. Partnering with Nissan will boost Mitsubishi Motors’ operating profit margin by about 1 percentage point this fiscal year and at least 2 percentage points each in the following two 12-month periods, Masuko said. The company forecast a steeper loss for this fiscal year on Wednesday.
Mitsubishi Motors has yet to identify potential synergies with Renault. Possibilities for collaboration include Renault’s diesel technology, Masuko said.
After his radical makeover of Paris-based Renault beginning in the 1990s and Nissan in the early 2000s, Ghosn earned the nickname “Le Cost Killer.” Taking over as Nissan’s president, he brought the then-struggling company back from the brink by breaking up its so-called keiretsu network of suppliers, shutting plants and leveraging an alliance with Renault.
“The question is: can he wear three hats and do a good job?” Bruno Aziere, a representative of the CFE-CGC union at Renault, said by phone. “How can he have enough time to devote himself to all entities?”
By Ma Jie and Masatsugu Horie