Nissan, Mitsubishi expand business tie up

TOKYO — Nissan Motor Co. and its smaller rival Mitsubishi Motors Corp. have agreed to expand the scope of their global business collaboration, including a possible mini car joint venture for the domestic market.

Under the agreement that the two Japanese automakers reached yesterday, Nissan will make a small van to be sold under the Mitsubishi brand for the Japanese market, while Mitsubishi will make an SUV sold under the Nissan brand in the Mideast.

The two companies said they are also discussing a joint venture for planning and engineering of mini vehicles for the domestic market, while also seeking to collaborate in upper-end models in Japan.

Mini vehicles are defined by specifications unique to Japan: maximum length of 3.4 meters (11.15 feet), width of 1.48 meters (4.86 feet), height of 2 meters (6.56 feet) and engine displacement of less than 660 cc.

Production of a Nissan pickup truck at Mitsubishi’s factory in Thailand is also under consideration, they said.

“This agreement is important for Nissan as it supports our expansion in emerging markets, meets immediate capacity needs overseas and enables us to grow our mini car business in Japan,” Nissan President and CEO Carlos Ghosn said in a statement.

Nissan and Mitsubishi already have several “original equipment manufacture” or OEM deals covering mini cars and commercial vehicles in Japan. Under such arrangements, one automaker supplies vehicles to another automaker to sell under its own brand.

The mini vehicle category is very popular in Japan for its money-saving potential, including lower fuel costs and taxes, as well as maneuverability in narrow back streets. They currently comprise about a third of Japan’s annual vehicle sales.

“I believe that the expansion of our OEM agreement will complement each others’ regional characteristics and product lineup,” said Mitsubishi president Osamu Masuko said.