It seemed like just yesterday that Nissan took a controlling stake in Mitsubishi Motors. Now, some insiders are saying that it’s looking to abandon the project like a crank-walked Eclipse. It’s no secret that Nissan is hemorrhaging cash, a one-two punch due to the weakening of the industry altogether and the compounded by the COVID-19 pandemic. But, Mitsubishi is worth less than half of what Nissan paid in 2016 and wouldn’t do that much to wipe out Nissan’s debt anyway.
Estimates put Mitsubishi Motors’ worth at $950 million, but Nissan’s losses for 2020 are on track to hit $3.2 billion. Still, when you need to raise cash the project cars have to go. Automotive News simply quoted “people familiar with the matter” as sources in their report this morning. For their part, Nissan and Mitsubishi have vehemently denied the rumor.
Nissan took a stake in Mitsubishi under the tenure of Carlos Ghosn, who wanted to build one the world’s largest automobile empire. Famously, Nissan blew the whistle on Mitsubishi’s cheating of Japan’s fuel economy tests on a kei car that Mitsubishi built and Nissan rebadged.
Mitsubishi stock prices plummeted and caused great shame, allowing Nissan to swoop in and buy a 34 percent stake, enough for full control under Japanese law. The timing was so perfect, many said Ghosn orchestrated the entire plan. Of course, Ghosn was arrested for alleged financial improprieties a couple of years later and then fled the country before he could stand trial.
Now Nissan is under a new regime, focused on going back to the company’s core strengths. If they were to sell, though, who would even buy Mitsubishi Motors? They’ve killed off their most iconic vehicles and under the alliance agreement is focusing on small and electric cars. Bloomberg predicts that another company in the massive Mitsubishi Group would be a candidate.
The two companies could still collaborate, as they did before the takeover. Rumors of a shared-platform Pajero/Patrol could still work, in theory. But, without the support of a larger automotive partner it’s unlikely Mitsubishi would survive in today’s climate. It’ll be interesting to see how the corporate intrigue unfolds in the coming weeks.