Nissan Motor Co. (NSANY) announced that it will invest 237 billion yen ($2.2 billion) to take a controlling interest of 34 percent of Mitsubishi Motors (MTU).

Nissan CEO Carlos Ghosn stated that the alliance would cover purchasing, common platforms, joint manufacturing, technology development and target shared cost savings. Nissan would also contribute corporate governance and management expertise to help Mitsubishi restore public trust in its brand.

Ghosn said: “We believe in the potential of Mitsubishi Motors.” He also shared that as Mitsubishi’s largest shareholder, Nissan would “preserve and nourish” the Mitsubishi brand.

Mitsubishi stands to gain a stable resource of cash and corporate management from Nissan. The hope is that this will help to restore Mitsubishi’s tarnished reputation from the recent scandal. Additionally, Mitsubishi may even get a much needed increase in product for the U.S. market to help shore us a fledgling recovery.

Nissan looks to gain a solid sales network in Southeast Asia which could help it in a market where is has failed to gain significant traction. Ghosn was quick to mention “Why spend twice?” meaning that both companies could share work and technologies in areas such as pickups, electric cars and autonomous vehicles. Both companies look to leverage a team effort on the development of electrified drivetrains, a technology both companies have targeted as a growth strategy.

Both companies stand to gain meaningful positions and opportunities through this deal. As Nissan Ghosn says: “it’s a win-win.”

What the partnership between Nissan and Mitsubishi Motors means for American consumers?

First

American consumers should know that Mitsubishi vehicles are not affected by the issues that are known about the Mitsubishi vehicles in Japan. After the news about vehicles overseas came out, Mitsubishi Motors North America organized a comprehensive third-party study to check the emissions on American vehicles and no inconsistencies have been found. Mitsubishi is continuing the study to be sure.  

Second

Combining the Nissan and Mitsubishi financing sources will provide for more opportunities for buyers on the financing side of purchasing. This could make the accessibility of finance options more viable for Mitsubishi and Nissan consumers. Additionally, this should affect leasing opportunities in the same, positive way.

Third

This new change to Mitsubishi Motors could mean great things for Mitsubishi's three new 2017 model year vehicles, the Mirage, Mirage G4 and Outlander PHEV. Though Mitsubishi has a relatively small presence in the U.S. market each of these new vehicles have received excellent reviews and the Outlander PHEV is the best-selling car in Europe. The Mirage and Mirage G4 are currently available in the U.S. and the Outlander PHEV is expected to be available this fall. 

Both companies stand to gain meaningful positions and opportunities through this deal. As Nissan Ghosn says: “it’s a win-win.”