Business / Corporate

Mitsubishi Motors to maintain alliance with Nissan

JIJI

Mitsubishi Motors Corp. CEO Osamu Masuko said Tuesday that his company will not review its alliance with Nissan Motor Co.

He made the comment in talks with reporters after Nissan Chairman Carlos Ghosn was arrested by the Tokyo District Public Prosecutors Office on Monday on suspicion of underreporting his compensation in violation of the Financial Instruments and Exchange Act.

Masuko suggested that Mitsubishi Motors plans to maintain its three-way alliance with Nissan and French auto giant Renault SA in wide areas, including parts procurement, and vehicle development and production.

Still, the arrest of Ghosn, who serves as chairman of the three automakers, is widely expected to increase uncertainty over the course of the alliance, analysts said.

Renault holds a 43.4 percent equity stake in Nissan, which owns 15 percent of partner Renault. Nissan owns a 34 percent stake in Mitsubishi Motors.

While maintaining respective independence, the three companies have been promoting cooperation to generate synergy.

Ghosn has recently referred to the possibility of reviewing the three-way alliance and the capital tie-ups. Apparently behind this was the pressure from the French government, a major shareholder of Renault, to increase its influence over Nissan, according to informed sources.

“The biggest focus is whether there will be a change in the trio’s power balance” following the arrest of Ghosn, Kentaro Harada, senior credit analyst at SMBC Nikko Securities Inc., said.

The possibility of the three automakers’ relations weakening cannot be ruled out once Ghosn is dismissed as chairman of the companies, he said.

On the Tokyo Stock Exchange on Tuesday, shares of Nissan and related companies, including Mitsubishi Motors, came under heavy selling pressure.

In 2016, Mitsubishi Motors, which had been struggling amid its fuel economy data manipulation scandal, received investment from Nissan to join the Renault-Nissan alliance.