Nissan to provide USD$1.8 billion for stake in Mitsubishi Motors, who are currently suffering from fuel efficiency scandal.
Nissan Motor Co. is in the final stages of negotiations on purchasing a 34 percent stake in Mitsubishi Motors, according to Japanese news source NHK.
Sources reportedly informed the news broadcaster that Nissan will provide over USD$1.8 billion (more than JPY¥200 billion) for their stake purchase.
Mitsubishi Motors has recently been suffering from a scandal concerning falsified fuel-economy ratings. As a result, orders for Mitsubishi vehicles in Japan have fallen by 10 percent since the scandal went public, Automotive News reports. The company’s shares have fallen 43 percent since April 19.
Nissan felt the burn as well, as the company developed and sold two models of Japan-exclusive “Kei cars” or minicars, under a partnership agreement with Mitsubishi.
Kei cars include passenger cars, microvans and pickup trucks of small sizes specifically designed to comply with Japanese government tax and insurance regulations and bypass a requirement for certified parking. As such, this class of vehicle is considered too specialized for export markets.
Mitsubishi admitted to falsifying the ratings on the Kei cars as well as nine other models, according to Bloomberg.
Nissan was not involved in setting fuel-economy targets for the Kei cars developed under their agreement, according to Mitsubishi Motors president, Tetsuoro Aikawa, who spoke at a briefing.
“We are disappointed this has occurred and regret that an incident like this can also happen in Japan,” The Globe and Mail quoted Takao Onoda, an official at Japan’s Transport Ministry.
Onoda went on to say Mitsubishi’s internal investigation into the cheating scandal has been insufficient and that the automaker has failed to explain whether or not there was any data manipulation in fuel testing for other models.
According to Bloomberg, the company has been ordered to present updated findings on May 18th and retest models involved by the end of June.
Stay tuned for more information.
