Nissan, Mitsubishi reportedly in minicar tie-up talks

[divinewisdom]

TOKYO -- Struggling Japanese automaker Mitsubishi Motors Corp. and bigger rival Nissan Motor Co. Ltd. are in talks to form a joint venture in the minivehicle business, media reports said on Thursday.

Mitsubishi already builds the Clipper, a 660cc commercial van, for Nissan on an original equipment manufacturing basis, while Suzuki Motor Corp. builds the Moco minicar for Nissan in the passenger car segment.

A Nissan spokesman said the company had no immediate plans to announce a further expansion into the minivehicle market, while Mitsubishi also did not confirm the reports.

Reports of the talks were carried by Kyodo news agency and public broadcaster NHK.

"Any reports on the future status of our relationship with Mitsubishi are pure speculation," Nissan said in a statement after the market closed.

Mitsubishi followed with a similar comment saying it was "continuously considering supplying a successor to the current model" but that there were "no further details to add at this time".

Kyodo reported the two companies would form a joint venture dedicated to building minivehicles, which have engine displacements of up to 660cc, folding in Mitsubishi's Mizushima plant, which produces the Pajero Mini, Clipper and other small trucks.

Mitsubishi, which is 22-percent owned by DaimlerChrysler AG, has suffered a sharp slide in sales since cover-ups of defects in its vehicles resurfaced this year, and is desperate to cut losses at its underutilized plants.

Last year, utilization at the 600,000-units-a-year Mizushima plant was around 85 percent, but that rate has fallen as Mitsubishi's minivehicle sales fell 21 percent in the first nine months of 2004 compared with the same period a year earlier.

As part of its revival plan, Mitsubishi, Japan's only unprofitable car maker, announced plans earlier this year to close its Okazaki plant in western Japan by the end of next year.

It said on Thursday it concluded the sale of its unused Oye factory in Nagoya, valued at 4.4 billion yen ($41.26 million), to sister company Mitsubishi Heavy Industries Ltd.

Mitsubishi, Japan's fifth-ranked car maker, had agreed early last year to supply 20,000 commercial minivehicles a year to Nissan, which aimed to boost its model line-up and sales volumes without investing in a minivehicle platform or engine.

Minivehicles get preferential tax treatment and make up about one-third of passenger cars in Japan.

Under its next three-year business plan starting in April, Nissan aims to lift global sales by 37 percent to 4.2 million units by the 2007/08 business year as it expands into untapped regions and segments.

autonews