Nissan, which agreed to pay over $2.5 billion in 2016 for a 34-percent stake in Mitsubishi, allowing the latter to join the Renault-Nissan Alliance, is now considering the possibility of selling some or all of it.
Bloomberg first reported the news, quoting unidentified sources who are familiar with the company’s plans. Neither Nissan nor Mitsubishi have made public statements so far.
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Should we be surprised? Not really. While it’s true that alliances and partnerships can have lots of benefits in today’s global economy, you have to remember that Nissan had an extremely tough year in 2019 and is currently in the midst of a major reorganization.
This includes cutting thousands of jobs around the world, reducing production costs, leaving certain markets and streamlining the product lineup to focus on models that actually fill a need (about one fifth will be dropped).
Slowly but surely, Nissan seems to be getting back on track, as evidenced by its latest financial results. The Japanese automaker’s operating loss for 2020 is projected to be $4.2 billion, down from around $5.8 billion as originally predicted. For the third quarter of this year, Nissan reported a loss of $59 million compared to $373 million the same time last year.
Obviously, there is still plenty of work to do. The decision to come to Mitsubishi’s rescue four years ago was made by former Renault-Nissan Alliance CEO Carlos Ghosn, but the new executives now see things a bit differently.
Mitsubishi has a few problems of its own and is expected to post an operating loss of $1.8 billion for the 2020 business year. The hope is that fresh new products will help turn the tide, including the refreshed 2022 Eclipse Cross and more importantly the next-generation Mitsubishi Outlander. The latter, remember, will share its platform and most likely its engine with the 2021 Nissan Rogue.
UPDATE (11/17/2020): Nissan has released an official statement in Japan saying "there are no plans to review the capital relationship with Mitsubishi Motors."