The Renault-Nissan Alliance is now called Renault-Nissan-Mitsubishi. Carlos Ghosn announced this today at the presentation of a new strategy for six years - until 2022. The name of Mitsubishi Motors (MMC), 34% of which is the alliance, is included in the official name, and the logo with two yellow-red lines is transformed into a kind of geometric figure with three vertices.
Alliance old logo
However, this is more of an advance. The official organizational structure on the website of the alliance has not changed: Mitsubishi is subordinate to Nissan, which organizes the group on an equal footing with Renault (50/50%). Moreover, the company responsible for the operation of the alliance and registered in Amsterdam is still legally called Renault-Nissan B.V.
Structure of the Renault-Nissan-Mitsubishi Alliance
As for the keynote speech itself, Carlos Ghosn first of all recalled that in the first half of 2017, the alliance came out on top in the world in car sales: 5 million 270 thousand cars and light commercial vehicles. The plan is to increase annual sales to 14 million vehicles by 2022, revenue to $240 billion compared to last year's $180 billion.
Carlos Ghosn
To this end, the alliance companies will release 40 new models, of which 12 will be purely electric, and one will be completely autonomous. With the introduction of a common electric bogie and platform for mid-size vehicles, the number of cars built on joint modular platforms will grow from two million to nine million a year. By 2020, Mitsubishi will also have access to common modular platforms: the total cost savings for the alliance should be $11.9 billion.
These are the goals in the first approximation. More detailed and specific plans will be announced at the conferences of each member of the alliance. By right of precedence, the first such meeting on October 6 will be held by Renault.
- MMCwill receive strategic, operational and leadership assistance fromNissan
- The main goal of the alliance is to achieve by the companyMMCprofitability growth
- Carlos Ghosn, President and CEO of Renault and Nissan appointed Chairman of the Board MMC
- The company approved a new position - Director of Global Risk Control
Tokyo, 20 October 2016 - Mitsubishi Motors Corporation (MMC) announced that Nissan Motor Co., Ltd. (Nissan) completed the purchase of a 34% stake in MMC for 237 billion Japanese yen and becomes the largest shareholder of MMC.
With Nissan's investment, MMC will become an equal member of the 17-year-old Nissan-Renault alliance, opening up new synergies for MMC to increase profitability and profitability.
Carlos Ghosn, President and CEO of Nissan Companies, has been appointed Chairman of the Board of Directors of MMC. Mr. Carlos Ghosn will be joined by three other directors nominated by Nissan: Mr. Mitsuhiko Yamashita, former Executive Vice President of Development and Research, Nissan, and Mr. Hiroshi Kawaguchi, Director of Balanced Strategy Head of Outside Global Operations, and Mr. Hiroshi Karube in charge of Global and Asset Management at the global level.
MMC President and Chief Executive Officer Mr. Osamu Masuko, in order to strengthen the company's position, requested that a Nissan executive be included on MMC's executive committee. Trevor Mann, currently Chief Operating Officer at Nissan, will become Chief Operating Officer at MMC.
“I applaud Nissan's willingness to provide strategic, operational and leadership support as our newest and key shareholder,” said Mr. Masuko. “As part of the board of directors and management team, Nissan will assist us in restoring the trust of our customers and strengthen mutual assistance within the alliance.”
MMC will establish a new position - Director of Global Risk Control, who will report directly to the company's Chief Executive Officer. He will be responsible for compliance with procedures and monitoring emerging risks. The Director of Global Risk Control will report regularly to the Board of Directors on measures taken to improve governance at MMC.
MMC's three largest investors, Mitsubishi Heavy Industries, Mitsubishi Corporation and The Bank of Tokyo-Mitsubishi UFJ welcome Nissan's investment and have expressed their support for candidates for the alliance's new board of directors. Over time, the three largest shareholders, together with Nissan, will own more than 51% of the share capital.
Building on 5 years of experience working on small cars, Nissan and MMC will start working together on a wide range of joint programs.
The companies have identified several areas in which they will work within the framework of the alliance:
The partnership promises to generate significant assistance for MMC, equivalent to a 1% increase in operating profit margin in 2017, 2% in FY2018, and more than 2% in FY2019. The projected earnings per share increase effect of MMC is 12 yen in FY2017 and 20 yen in FY2018.
Ghosn said: “The resulting alliance will be one of the largest automotive alliances in the world, with annual sales of 10 million vehicles in fiscal 2016. In addition, Mitsubishi Motors will build on the entrepreneurial and collaborative spirit that has characterized our alliance with Renault for 17 years. I am confident that this alliance will benefit all parties involved.”
The amount of the transaction, which will be closed before the end of the year, will be $2.18 billion. According to its results, Nissan will become the largest shareholder of the competitor.
The agreement signed between the two companies actually leads to the formation of a new major alliance.
Nissan and Mitsubishi have worked together for a number of years, but now the partnership in various areas will be taken to a whole new level. We are talking about procurement, the unification of platforms for cars, the sharing of technologies and production capacities.
“This agreement is a significant breakthrough and win-win deal for both Nissan and Mitsubishi Motors,” Ghosn said. - Cooperation will create a new dynamic force in the automotive industry, which will actively and fruitfully interact. We will be Mitsubishi's largest shareholder, honoring the brand, its history and its future. We will stand by Mitsubishi in this challenging time and are pleased to welcome the company as a new member of our extended alliance family.”
Speaking about the difficult situation, the top manager had in mind a grandiose fuel scandal, in the epicenter of which Mitsubishi was in April. It turned out that the company for 25 years underestimated the data on fuel consumption in some models. The company also admitted that they tested their cars bypassing the rules in order to indicate lower fuel consumption in the documentation. According to preliminary data, this figure was underestimated by 5-10%. Mitsubishi apologized for the fraud and suspended sales of the eK Wagon and eK Space subcompacts, but the full list of models that underestimated fuel consumption - there are at least ten of them, including Pajero - is still unknown. In total, we can talk about 2 million cars.
The scandal, which caused a harsh reaction from the Japanese authorities, brought down Mitsubishi shares by a third, the company "lost weight" by the very two-plus billion dollars that Nissan is now going to invest in it.
It is noteworthy that against the background of revelations, sales of small cars in Japan collapsed by 60%, and in addition to Mitsubishi products, demand also collapsed for cars of the same class from Nissan, which were developed at a joint venture between the two companies, which has been operating since 2010.
“Nissan Motor has a wealth of knowledge that will help us get the most out of our mutual partnership,” said the head of Mitsubishi Motors at a press conference. — This agreement is aimed at future progress and mutual benefit for our companies. Through our close strategic partnership, pooled market development resources and joint procurement, we will reap long-term benefits.”
Mitsubishi said in a press release that Nissan's decision to buy the shares is "a milestone in the expansion of the alliance built over 17 years through cross-sharing with Renault." "Nissan has also acquired stakes or signed partnerships with other automotive concerns, including Daimler and," Mitsubishi recalled.
The inclusion of Mitsubishi in the Renault-Nissan alliance will allow the new association to compete for the second or third place in global car sales with the Volkswagen and GM concerns in terms of total sales, which annually sell about 10 million cars.
The leader of the global automotive industry is still Toyota, which was able to step over this mark last year.
Mitsubishi Motors has agreed to sell 34% of its shares to Nissan for $2.2 billion. The deal will be closed before the end of the year amid a scandal with falsified fuel tests that brought down Mitsubishi quotes
Nissan will acquire a 34% stake in Mitsubishi Motors, which has become a defendant in a "fuel scandal" due to the underestimation of fuel consumption data in the technical documentation of a number of models, writes the Financial Times. The deal was announced at a joint conference between the two automakers.
The publication notes that the announcement of the agreement followed at a time when Mitsubishi needs funds to survive the scandal.
The deal was valued at 237.3 billion yen (about $2.2 billion) and will close before the end of 2016, making Nissan the largest shareholder of Mitsubishi. “We will help this company solve the problems it is facing, in particular to restore consumer confidence in the fuel economy system,” Carlos Ghosn, chief executive of Nissan and Renault, said at a press conference.
Mitsubishi Motors Chairman Osamu Masuko said it would be difficult to restore confidence. “With Nissan, we will start moving towards this goal,” Masuko assured.
Mitsubishi fuel consumption for more than 600,000 vehicles April 20th. This led to a drop in the company's shares by 43%.
The company said it had set up an independent commission to investigate the incident. The tests, the results of which were fabricated, were carried out on 157,000 Mitsubishi vehicles and 468,000 Nissan vehicles. It was Nissan, for whose vehicles Mitsubishi was also testing, who pointed out the inconsistency in the data, after which Mitsubishi conducted an internal investigation and found out that the data had been falsified.
Later, Mitsubishi Motors president Tetsuro Aikawa, admitted that the company had been spending fuel since 1991. As Aikawa noted at the time, the investigation into the fraud is ongoing. The president of the company stressed that he did not know why his employees decided to engage in falsification.
Earlier, Volkswagen admitted to cheating during emissions tests. Now she is negotiating with the US authorities about the fines that the automaker must pay for fraudulent tests.
Filed in January 2016, Volkswagen faces a fine of up to $46 billion for violating environmental laws. In addition, in March, more than 270 institutional investors from around the world filed a €3.3 billion lawsuit against the automaker for concealing information about harmful emissions. At the end of March, the US Federal Trade Commission filed a lawsuit against Volkswagen.
