As Mitsubishi Motors Corp. on Monday announced a capital tieup with DaimlerChrysler AG, the dust may begin to settle from a series of realignments that have changed the landscape of Japan's automotive industry.

While many analysts note the benefits of mergers and groupings among the world's leading automakers, others point out that the future of the business depends on whether the carmakers can take advantage of their strategic alliances.

And the task of introducing hit products to the market will continue to be their top priority, they said.

"Manufacturing millions of vehicles (annually) does not necessarily mean making profits, although larger groups can reduce operation costs by sharing facilities and platforms and by jointly procuring auto parts," said Nobuyoshi Yoshida, president of Automotive Practice Institute Inc., a private think tank. "A small carmaker can still be profitable by making hit products."

Referring to the recent wave of realignments that began with the merger of Daimler-Benz AG and Chrysler Corp. in 1998, analysts admit that mergers are an efficient way of promoting businesses, especially for the automakers that seek to expand their global presence.

"Automakers can reduce costs by sharing facilities and exchanging necessary technologies," said Seiji Sugiura, senior analyst at the Nomura Securities Co.'s financial research center.

He said major European and American automakers are able to take the initiative in forging global alliances in part thanks to their native countries' booming economies.

For Japanese automakers, the benefits seen in many of the tieups could go beyond the expansion of their markets.

Nissan Motor Co., which is struggling with 1.4 trillion yen in debts, sought the financial support of Renault SA, which obtained a 36.8 percent stake in the Japanese automaker in May.

Ford Motor Co. also increased its stake in Hiroshima-based Mazda Motor Corp., which owed its financial crisis to excessive investment during the bubble economy, to 33.4 percent in 1996.

Mitsubishi Motors Co., which prospered with its hit sport-utility Pajero vehicle in early 1990s, has accumulated huge debt. It has had no recent hit products and is suffering from declining truck sales due to Japan's prolonged economic slump.

One industry expert notes that this latest tie up is not simply about fixing up the bottom line.

"The (DaimlerChrysler) deal will barely improve MMC's financial situation," said Noriyuki Matsushima, managing director of Nikko Salomon Smith Barney Ltd., a private think tank. "One major challenge for MMC is whether it can increase its sales by taking advantage of this partnership."

According to the agreement, the two companies will cooperate on design, manufacture, development and distribution of passenger cars and sport-utility vehicles.

With MMC coming under the wing of the German-U.S. giant, a total of three major Japanese companies will be controlled by foreign automakers.

Under Japanese law, having 33.4 percent stake in a firm gives the shareholder the right to veto proposals concerning company management.

MMC, according to the Monday's agreement, will maintain its "management independence," but some experts says it's possible the German-American automaker will actually control MMC's management as Ford Motor manages Mazda and Renault rules Nissan.

They even say that MMC president may be replaced with the executive of DaimlerChrysler in the future.

"MMC's current situation came from the failure of its business strategies," said Nomura's Sugiura. "I wonder if DaimlerChrysler, which has the right to veto proposals concerning MMC's management, would continue to allow MMC to create business strategies."

Since Toyota Motor Corp. has also reinforced its partnership with domestic automakers -- Daihatsu Motor Co., Hino Motors Ltd. and Yamaha Motor Co. -- over the past two years, Honda Motor Co., with annual production of 2.4 million units, is the only Japanese automaker that seems to be taking a different approach.

Honda President Hiroyuki Yoshino has often said that Honda could thrive independently. But even Honda may move for capital tieup with other automakers in the future, some experts predict.

Automakers spend billions of yen on development of next-generation technology including low-emission vehicles and fuel cells, and no automaker would deny the necessity of at least partial alliances with competitors.

Honda is currently planning to supply fuel-efficiency engines to GM, while Toyota is forming a partnership with GM in the development of environmentally friendly vehicles and is providing high-efficiency engine technology to DaimlerChrysler and Volkswagen AG.

Some experts say that how long the current groups will last would depends on how automakers utilize the alliances and how the global economy changes.

"If the alliances don't bring value, reshuffles of the group members may happen," Sugiura of Nomura Securities said.