With Mitsubishi Motors beset by a massive fuel economy cheating scandal in Japan, news outlets in that country are reporting that competitor Nissan is in talks to take over the automaker.
The Nikkei reports board meetings will take place Thursday to discuss a move by Nissan to spend some 200 billion yen, about $1.84 billion, to take a 30 percent interest in Mitsubishi Motors. That would make Nissan the controlling shareholder, greater than parent company Mitsubishi Heavy Industries’ current 20 percent. (Mitsubishi Heavy Industries is a massive company with subsidiaries that sell everything from electronics to military equipment.)
In late April, it was revealed that Mitsubishi Motors was cheating on fuel economy tests in Japan by fiddling with tire pressures during testing to overstate actual efficiency. The possible takeover reporters are interesting because Mitsubishi was called out by Nissan, which sells re-badged Mitsubishi microcars under its own name. Fuel economy was overstated by as much as 10 percent, according to news reports.
Since then Mitsubishi has conceded that possibly all of its current and former Japanese market cars were cheating the same way. Bloomberg reports Mitsubishi has been in rough shape since the revelations:
Orders for Mitsubishi vehicles in Japan have plunged after the company first revealed it had overstated the fuel economy of its minicars by as much as 10 percent. The scandal has also affected Nissan, which sold two of the minicar models under a partnership agreement.
Mitsubishi Motors shares have fallen 43 percent since April 19, closing Wednesday in Tokyo at 495 yen. Its U.S. shares jumped 11 percent to $4.92 at 12:44 p.m. New York time. Nissan’s American depositary receipts fell 1.5 percent to $18.30.
More on this as we get it.