Carlos Ghosn: Mitsubishi to Retain Distinct Identity Following Nissan Takeover

Mitsubishi Motors Corporation (MMC) will not be reduced to just rebadging models of its soon-to-be new owner Nissan, assured Nissan Motor Co Ltd’s President and CEO Carlos Ghosn in a conference call Q&A session with journalists across the Asia Pacific region.

Earlier this week, the two companies announced that they have signed a Basic Agreement to enter a ‘strategic alliance’ encompassing areas of purchasing, vehicle platforms, technology, plant utilization, and development in growth markets.

Concurrent with the agreement, Nissan will assume a 34% equity stake in MMC, making it the company’s single biggest shareholder. The transaction remains subject to the signing of a definitive Alliance Agreement (expected by the end of May 2016) as well as the signing of a shareholders agreement with other major stake holders of MMC from the Mitsubishi Group keiretsu.

Globally, Nissan’s production volumes exceeds Mitsubishi’s by over five-fold; the former makes 5.4 million cars a year, whilst the latter rolls out around a million cars in the same timeframe.

Elaborating on the goals of the tie-up, Ghosn emphasized that both Nissan and Mitsubishi will continue to run as independent entities and retain their separate distinct identities to consumers. He points out that the Mitsubishi brand is a strong asset with rich heritage to be preserved. According to him, Nissan aims to see MMC emerge as a stronger outfit than its present embattled state from the tie-up.

Both brands enjoy strong presences in Southeast Asia. In 2014, new Nissan plants opened in both Thailand and Indonesia, boosting its ASEAN production capacity by 300,000 units per annum. Mitsubishi, meanwhile, is in the midst of building a new 160,000-capacity plant in Indonesia whilst having also acquired Ford’s old plant in the Philippines in 2014.

Moving forward, Ghosn has ruled out closing any plants in the name of rationalization, but states that cross manufacturing between the two brands will be likely.

Future products of the two brands will undoubtedly be underpinned by common platforms and shared technology, but Ghosn emphasizes that they will be developed separately to ensure that they continue to carry the distinct flavours of their respective brands.

He points to the ongoing nature of the Renault-Nissan Alliance which sees Renault and Nissan vehicles, despite sharing certain hardware and common platform, have very distinct characteristics – the Nissan X-Trail and Renault Koleos, for example. This contrasts products of the Volkswagen Group, where all vehicles irrespective of brand, seem to have similar driving characteristics.

The two companies will also benefit from their combined economies of scale to optimize production costs; Mitsubishi will particularly benefit in instances where its design and technology are adopted by bigger-volume player Nissan.

When asked about what Mitsubishi has to offer to the Renault-Nissan Alliance that the two component companies do not already possess, Ghosn points to Mitsubishi’s superior plug-in hybrid powertrain technology for which Nissan is still in the infancy stage of development.