Mitsubishi Motors Corp. will supply its Minicab commercial vehicle to Nissan Motor Co. on an original equipment manufacturing basis, the firms said Thursday.
The deal is part of Nissan's strategy to increase sales by 1 million units worldwide by the end of March 2005.
MMC will deliver a total of 20,000 Minicab trucks and vans annually to Nissan, which will sell them under its own brand.
Yukio Kitahora, senior vice president in charge of Nissan's domestic sales, said the agreement will enable Nissan to extend its product lineup and attract new customers, including farmers.
MMC meanwhile will be able to reduce development and manufacturing costs and lift productivity through increased economies of scale, said Christian Cahn von Seelen, senior executive officer in charge of MMC's business development office.
No new investment on manufacturing equipment will be necessary for the OEM deal, he said.
Nissan entered the minicar market in April 2002 with the launch of the Moco, which was supplied by Suzuki Motor Corp. through an OEM deal. The model has sold about 40,000 units, Nissan said.
To further cash in on minivehicles, which comprise about 30 percent of the domestic market, Nissan asked MMC last fall to provide a mini commercial vehicle, said Andy Palmer, a program director of Nissan's light commercial vehicles business.
Asked why Nissan chose MMC as a partner, Kitahora said the alliance will benefit Nissan and that the Minicab model most suits Nissan's sales strategy.