Mitsubishi Motors Corp. on Thursday agreed to let DaimlerChrsyler AG increase its planned equity stake in MMC and send a top officer to its executive board, MMC sources said.
MMC will hold an extraordinary board meeting today before announcing changes in the executive roster, including the resignation of President Katsuhiko Kawasoe and promotion of Vice President Takashi Sonobe to replace him, the sources said.
The announcement is expected this afternoon, according to the sources.
Under the agreement, DaimlerChrysler is allowed to raise its equity stake to just under 40 percent from 34 percent, the sources said. Consequently, DaimlerChrysler's interest in MMC will be greater than that of all Mitsubishi group companies combined, and the firm is thus expected to have a greater influence on the Japanese carmaker's decision-making process.
The German-U.S. automaker will also send a chief operating officer who will oversee the car division of MMC, which also builds trucks and buses; the officer will act also as vice president, the sources said.
DaimlerChrsyler's move to increase its equity stake will reduce in relative terms the interest of AB Volvo, a major Swedish truck builder, in MMC.
In the months ahead, Volvo could ask MMC to let it increase its stake in MMC, industry sources said. Volvo now has a 5 percent stake.
Top executives from MMC and DaimlerChrysler held meetings on Wednesday and Thursday in Tokyo to discuss new terms of their proposed alliance following the revelation that for three decades MMC had deliberately hidden customer complaints and automobile defects from government regulators.
Under the initially agreed terms of their business alliance, announced in March, DaimlerChrysler was to acquire a 34 percent equity stake in MMC.