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NEWS
Mitsubishi shares the joint venture love
Renault-Nissan announcement has no bearing on existing PSA arrangementsMitsubishi's announcement that it has entered into an agreement with the Renault-Nissan Alliance is a new example of current pragmatic thinking in the global automotive industry.
It won't directly affect the manufacturer's existing contract with PSA Peugeot Citroen – with the Japanese company building the 4008 and C4 AirCross for the two French firms – says Mitsubishi Motors Corporation president, Osamu Masuko, interviewed by Australian motoring journalists in Tokyo last week.
"PSA is a very important alliance for us, first of all," said Masuko-san through an interpreter. "In Russia at the moment, with PSA, we are actually [jointly] operating a plant. For EV development we're cooperating with PSA, and... then we have SUVs too. So we are going to be continuing with them.
Masuko-san describes the new venture with Renault-Nissan as "complementary," saying it exists in an area of the market untouched by the company's agreement with PSA.
That collaboration with PSA has worked well for Mitsubishi, offering the company greater reach and penetration in markets across the world. From the PSA perspective, Mitsubishi has supplied product that Peugeot and Citroen previously couldn't offer their buyers. In that context, Mitsubishi was the supplier, PSA has been the customer.
The shoe is on the other foot with Renault-Nissan however. Mitsubishi is the customer and Renault-Nissan is the supplier. And given the likelihood Renault-Nissan will provide its CMF modular architecture to underpin Mitsubishi's D segment sedan, and possibly the Lancer replacement in the small 'C' segment as well, Mitsubishi's long-term aim is clearly to reduce its expenditure in those two segments. Future small and mid-size cars may be not much more than badge-engineered Nissans or Samsungs, if the trend to cost-cutting and model/platform/drivetrain-sharing progresses as it is.
So the decision to climb into bed with Renault-Nissan hints at both the desertion of medium and small-car segments, and a concerted attempt to regain some relevance in global markets – particularly North America, where a D segment model has been missing since the demise of the Galant that formed the basis of the Aussie-built 380.
Is it all about cost cutting? And what drove Mitsubishi to join forces with Renault-Nissan for the D segment car (and possibly the Lancer successor as well)? PSA has its own platforms too, the 508 would make a viable platform to underpin a D Segment Mitsubishi. Was the Renault-Nissan venture worked out because they could offer the better product in the form of the CMF modular architecture?
Masuko-san says no.
"Rather than that," he replied, "I've heard in the news that PSA is seeking every possibility... that's what I hear.
Reading between the lines, the Mitsubishi president may have been concerned about the current financial weakness of PSA, versus the strength of Renault-Nissan.
"GM has the equity... the shares of PSA – seven to 10 per cent. And the world's media is announcing an alliance with a Chinese automotive manufacturer too.
"Where we can cooperate with PSA, we would like to cooperate with PSA... and wherever we can cooperate with Nissan-Renault, we would like to cooperate with Nissan-Renault. I think we can have other business partners too."
Was it PSA's very 'promiscuity' that has deterred Mitsubishi from extending its involvement with the French firm – with the potential for Mitsubishi's intellectual property falling into the hands of competitors? That was certainly the reason GM would not sell the 9-5 design and IP to the Chinese company that bought the Saab brand name.
"It's true..." Masuko-san agrees. "If I recall now, if I think back, that is true. But when we started, the environment was different; it was not the present environment that we're facing. We'll actually think hard about this. That was the past, so we have to think how to go forward."
Development work on Peugeot's 4007 would have commenced prior to the GFC. Whether Mitsubishi would now enter into a new agreement of a similar kind with PSA rests very much in the field of speculation.
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Written byKen Gratton
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