Nissan is buying $2.2 billion controlling stake in Mitsubishi Motors and becomes the single largest shareholder in its smaller, scandal-hit rival. Nissan has agreed to buy a 34 percent stake in Mitsubishi Motors Corp as the second seeks outside capital to survive the scandal over manipulated fuel economy data.
Last month, Mitsubishi, Japan’s sixth-largest car maker, admitted it had been exaggerating the numbers on its fuel economy data in order to make cars seem more efficient than they were in reality.
Nissan CEO Carlos Ghosn warned Friday that he would scrap Mitsubishi deal if its fuel-economy cheating scandal spreads beyond Japan. The deal depends on the outcome of the Japanese Transport Ministry’s investigation which is expected to lay bare more details about the cheating.
Mitsubishi is the second automaker accused of manipulating environmental data in the last 12 months. Germanan Volkswagen admitted a few months ago that 11 million of its vehicles were equipped with software that was used to cheat on emissions tests.
The scandal was reported to cover almost every model sold in Japan since 1991, including mini cars produced by Mitsubishi for Nissan as part of a joint venture.
The deal is a lifeline for Mitsubishi Motors as this is its third scandal in the last two decades and the company’s market value has fallen around 42 percent ($3 billion) since the scandal broke in late April.
The companies plan to sign an agreement by May 25. According to it, Mitsubishi will remain a separate brand, with its own network of dealers and Nissan will send engineers to Mitsubishi’s vehicle-development team. Mitsubishi Motors will compensate owners for the fuel-cost difference in affected vehicles and also may have to pay back government tax rebates.
