Mitsubishi buys back major stake from Nissan—what it means for their alliance

Mitsubishi made a significant move by purchasing 10% of its shares back from Nissan, reducing Nissan’s stake from 34% to 24%. The decision, announced on November 7, is part of a broader strategy by Mitsubishi to strengthen its ownership and, potentially, redefine its direction.

The share buyback will take place on the Tokyo Stock Exchange, where Mitsubishi has committed to buying up to 149 million shares at approximately $3.01 per share.

A growing partnership amid the buyback

Despite the stake reduction, Mitsubishi and Nissan remain committed to their alliance, which includes Renault as a third member. The two automakers work together on multiple vehicles outside the U.S., but at the moment only produce one joint venture for American buyers. In the U.S., the Mitsubishi Outlander and Nissan Rogue share platforms, thanks to joint engineering efforts.

The brands have hinted at upcoming ventures, including a potential mid-size pickup for the U.S. market. As Nissan navigates its current financial hardships, the automaker has said it plans to leverage partnerships with other automakers in order to quickly develop hybrid and electric vehicles for the U.S. and Chinese markets.

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Nissan’s growing financial troubles

The buyback coincides with challenging times for Nissan, which recently announced it would cut 9,000 jobs globally and reduce its production capacity by 20%. Citing disappointing sales, Nissan also slashed its annual operating profit forecast by 70%, now expecting $975 million instead of the anticipated $3.25 billion.

Though the companies haven’t directly linked the share buyback to Nissan’s restructuring, the timing aligns with Nissan’s ongoing efforts to cut costs and refocus its resources.

Final thoughts

Mitsubishi’s move to regain more control could signal a shift in how the brands approach their collaboration. While Nissan faces turbulent times, Mitsubishi may be setting a course to strengthen its independence while selectively collaborating in areas like vehicle development.

With Mitsubishi fading into the background of the American automotive market over recent years, we hope this buyback is the start of a reinvigorating era for one of Japan’s great automakers.

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