The boards of Nissan and Mitsubishi will meet separately, to review the details.
Could Nissan Take Control of Mitsubishi?
The boards of both car companies will meet Thursday to discuss a potential takeover of the embattled Japanese car manufacturer. The boards of Nissan and Mitsubishi will meet separately, reviewing the details of the takeover.
The move would be massive for Nissan who is poised to take control of Mitsubishi Motors with an investment of $1.84 billion, or more than 200 billion yen. The investment, should both parties proceed, would mean Nissan is their single largest shareholder.
Fuel Ratings Cheat
Mitsubishi shares have plunged more than 43 percent since April 19, when their top officials admitted to cheating on fuel rating numbers on several models. On May 11, Mitsubishi announced nine more models that are affected by the fuel ratings fudging, expanding beyond the minicars that were initially involved and including an SUV model as well.
Fuel ratings were incorrectly calculated based on Mitsubishi’s own fuel rating formula, resulting in inaccuracies of up to 10 percent in some cases. Because they supply some minicars to Nissan, some Nissan vehicles have been affected by the fuel rating falsifications.
This isn’t the first major scandal Mitsubishi has been involved in. In 2004, they received a massive bailout by other Mitsubishi corporations when they admitted systematic cover-ups of customer complaints over more than two decades.
Questionable Finances
This time around, Mitsubishi is facing up to $1 billion in compensation to its customers for eco-taxes and excess fuel costs, though a compensation plan for affected customer has yet to be determined. Just hours before the potential Nissan investment was announced, officials claimed they had the necessary resources to deal with the financial fallout from the self-induced crisis. That now seems questionable with the subsequent Nissan investment news.
In light of the most recent announcements of fraudulent fuel economy claims, U.S. environmental regulators have ordered that testing be done to determine the accuracy of Mitsubishi models delivered in North America. There are three cars and two SUVs sold here in the U.S. including the Mirage, Lancer, and Outlander Sport.
