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Nissan is exploring the possibility of selling 34% of Mitsubishi Motors: Bloomberg

Asia / Engineering

Rumors about the disintegration of the Renault-Nissan-Mitsubishi alliance appear with enviable regularity, but have never been more true.

Nissan is exploring the possibility of selling 34% of Mitsubishi Motors: Bloomberg

Nissan may sell its stake in Mitsubishi Motors in an attempt to recover from the recession caused by the pandemic, Bloomberg reports.

Such a deal would fundamentally change the trilateral partnership built by Carlos Ghosn, the former chairman of the alliance, who was arrested in 2018 on charges of financial fraud.

Ghosn wanted a complete merger between Renault and Nissan, which Reuters sources said was delayed as the companies decided to refinance the troubled alliance. However, the pandemic has exacerbated the problems and made recovery difficult.

Nissan, which is 43% owned by Renault, cut its forecast for operating losses for the year to March by 28% last week, boosted by recovery in demand, especially in China. Mitsubishi Motors, Japan's No. 6 auto maker, expects an operating loss of 140 billion yen for the fiscal year.

Both companies are cutting production and costs to return to profitability.

Nissan shares rose 5% on news of the sale of shares. Mitsubishi Motors shares are up 3%.

Both companies declined to comment on the Bloomberg post and announced further joint activities within the existing alliance.

Renault-Nissan-Mitsubishi Alliance is a strategic Franco-Japanese partnership in the field of mechanical engineering development. Formed in October 2016.

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