We weren't expecting this: Nissan, the automaker who discovered the manipulation of fuel economy figures at Mitsubishi Motors, is currently in the final stages of buying a controlling stake into the company.
According to reports from NHK and the Nikkei Asian Review, Nissan will spend roughly 200 billion Yen (about $1.8 billion) to acquire over 30 percent interest in Mitsubishi Motors. This would make Nissan the largest shareholder in the company, surpassing Mitsubishi Heavy Industries, which currently has a 20 percent stake.
This news comes after Mitsubishi announced that all of its models sold in Japan since 1991 may have inflated fuel economy numbers. Since the scandal came to light, shares in Mitsubishi Motors have dropped 43 percent. Sales of Mitsubishi vehicles in Japan have also taken a turn for the worse. Mitsubishi Motors says they have enough money to cover the scandal and will not seek help from Mitsubishi group companies.
Why would Nissan want a controlling stake in Mitsubishi? A couple of reasons. One, Mitsubishi vehicles are very popular in markets such as Thailand and Indonesia. In fact, Asia makes 50 percent of the company's group operating profit. There is also talk about the two cooperating on electric vehicles.
Both companies will hold board meetings tomorrow to discuss the capital tie-up and how the shares will be distributed.
UPDATE: Both Mitsubishi and Nissan confirmed they are in talks this morning in Japan.
"Nissan and Mitsubishi are discussing various matters including capital cooperation, but nothing has been decided," according to statements released by both companies.
Reuters confirms that the board of both companies will be holding separate meetings today to discuss this issue.