Nissan makes a bid for Mitsubishi

Japanese broadcaster NHK has broken the news that Nissan is considering a 200 billion yen (A$2.5 billion) investment in struggling manufacturer Mitsubishi.

According to NHK, as reported by Bloomberg, Nissan is close to concluding talks that would lead to Nissan acquiring 34 per cent of Mitsubishi, which has seen its share price tumble to 495 yen – a 43 per cent slump – since April 19. The share price has dropped in the aftermath of Mitsubishi's admission that it has been promulgating false economy test results since 1991.

Mitsubishi and Nissan are anticipated to hold board meetings today to put the final touches to an agreement. There's an element of calculated adventurism in Nissan putting the moves on Mitsubishi at this time, given it was Nissan that blew the lid on Mitsubishi's falsified test results in the first place. But Nissan could also claim to be the victim of Mitsubishi's corporate malfeasance, since Nissan was unwittingly selling rebadged Mitsubishi models that were the subject of the rigged results.

The Japanese Transport Ministry has demanded an update from Mitsubishi by May 18, and models involved are to be retested before the end of June. Mitsubishi has blamed an employee who was reportedly under pressure to meet fuel efficiency targets and used an unapproved method of calculation.

Mitsubishi's woes didn't begin with the latest scandal. A decade ago the company was forced to admit it had covered up vehicle defects as far back as 1977. Its sales in America went into steep decline from that point. In more recent times Mitsubishi has made no secret of the fact that it is reinventing itself as a builder of light commercial vehicles and SUVs, turning its back on in-house development of passenger-car models.

Since the news broke that Mitsubishi's fuel economy results had been falsified, the manufacturer has admitted that the Outlander and Pajero may also be affected. Both models are sold in Australia, but there's no confirmation as yet that the scandal has skewed Australian (ADR 81/01) figures for the models sold here.

Late last month Mitsubishi Motors Australia Ltd (MMAL) issued a statement as follows:

Mitsubishi Motors Australia (MMAL) has been informed of a certification process issue affecting four mini-car models manufactured by Mitsubishi Motors for the Japanese domestic market.

MMAL wishes to clarify that none of these mini-car models are sold in the Australian market.

Our parent company has found that the same testing method has been applied to other models manufactured by MMC for the Japanese domestic market.

Taking into account the seriousness of this issue, MMC has advised it will also investigate products manufactured for overseas markets.

This investigation will be conducted by a committee of experts operating independently of Mitsubishi Motors.

In the meantime, MMAL will continue to monitor the situation closely.