Nissan grabs 34% stake in Mitsubishi Motors in wake of economy/emissions rigging scandal

Nissan is to take a controlling 34 per cent stake in Mitsubishi Motors in the wake of the Mitsubishi economy test rigging scandal.

Nissan may, on the face of it, be the injured party in the Mitsubishi economy test rigging, as Nissan-badged cars were more affected than Mitsubishi-badged ones in Japan’s minicar market, but they’ve turned that on its head.

After outing the errors in Mitsubishi’s economy testing, Nissan has now stepped in and taken a 34 per cent controlling share in Mitsubishi Motors for around £1.5 billion – about half of what it would have cost before the scandal broke.

But even though Nissan has been quick to take advantage of the situation, the deal should be good for both Nissan and Mitsubishi going forward.

The access Mitsubishi Motors will inevitably get to Nissan’s technologies and expertise should help it continue its re-invention as a maker of ‘Green’ cars and crossovers, and it will ensure the continuation of the deal to build Nissan’s minicars for Japan (a huge local market).

There will also be better opportunities for the shared development of electric cars and autonomous vehicles, and Nissan should also benefit with access to Mitsubishi’s big South East Asia network and overall economies of scale.

The fact that the economy test rigging also appears to affect only cars in the Japanese market (Mitsubishi has written to UK owners assuring them that no UK models are wrongly certified) should mean the fallout really only affects sales in Japan, so Nissan are on a pretty safe bet grabbing a big stake at a bargain price, with little potential downside for global operations.