Nissan-Mitsubishi merger ruled out by Carlos Ghosn

Clearing the speculation air revolving around the Mitsubishi brand's future, chairman of the Nissan-Renault-Mitsubishi alliance - Carlos Ghosn, has announced that there are no plans to merge Mitsubishi and Nissan in the near future. This announcement comes after various reports claimed that the Japanese automakers might undergo a full merger in order to avoid the alliance from incurring losses due to dwindling sales of the Mitsubishi brand.

Nissan had bought a controlling stake in Mitsubishi in October last year through a deal valued at US$ 2.3 billion. Ghosn was made the chairman of Mitsubishi, which was at that time, suffering from dropping sales numbers and the infamous fuel efficiency test cheating scandal.

While ruling out the possibility of a complete merger of the Nissan and Mitsubishi brands, Ghosn claimed that the company is taking various steps that will help Mitsubishi to reform itself. Nissan and Mitsubishi are also planning to jointly develop and cross-manufacture products in certain markets in order to reduce production and development costs and thus enhance the resulting profits.

Mitsubishi is banking on the Southeast Asian markets to drive its sales. The company is hoping to increase its market share in Indonesia to 10% in the next three years, from the current 6%. Indonesia is currently the largest automotive market in Southeast Asia and is thus important for the Japanese automaker.

Source: Reuters