Mitsubishi, Nissan To Merge Transmission Businesses

Autoparts Report,  Oct 8, 2001  

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Mitsubishi Motors Corp., Japan's number-four carmaker, said it plans to spin off its transmission division and integrate it with Nissan's transmission subsidiary Jatco TransTechnology Ltd. "The result of the integration would be that Jatco TransTechnology will become a top-tier manufacturer of automatic transmissions and continuously variable transmissions,"

Nissan President and CEO Carlos Ghosn said in a statement. Nissan said an initial public offering was an option for the new company, due to be created by the middle of next year.

Nissan is 36.8 percent owned by French automaker Renault

Jatco said the integrated company aims to make four million transmissions annually within several years of the integration.

Jatco, a leading company in continuously variable transmission technology which offers greater fuel efficiencies, is currently owned 99.7 percent by Nissan Motor Co. Ltd. Mitsubishi Motors said it expects to hold a minority stake of about 20 percent in the new company. The automaker is itself owned 37.3 percent by DaimlerChrysler AG.

Mitsubishi, just embarking on a revamped restructuring plan, would be following in the footsteps of Nissan with the move to spin off, outsource or sell divisions for much-needed cash. Nissan is already well into its own revival plan that has seen it rapidly slash costs through the outsourcing of various operations under President Ghosn.

Under the proposed deal, Jatco and Mitsubishi will also jointly develop automatic transmissions to cut development costs. Although continuously variable transmission technology has shown much promise to date, other automakers have been slow to adopt the technology.

COPYRIGHT 2001 Ron DeMarines
COPYRIGHT 2008 Gale, Cengage Learning