The short-lived alliance might be ending.
As Nissan continues to revive itself both financially and product-wise, the Japanese automaker has been making some painful cuts over the past several months. The good news is that those sacrifices are beginning to pay dividends, as we just learned. The not so good news is that one of Nissan's alliance partners could be sacrificed. Bloomberg has learned from unidentified sources that Nissan is examining the possibility of selling some or all of its 34 percent stake in Mitsubishi.
Mitsubishi became the third wheel of the Renault-Nissan Alliance back in May 2016 when Nissan agreed to pay $2.2 billion for that 34 percent piece of the pie. At the time, Mitsubishi was in the midst of its third scandal in just two decades, the most recent regarding overstating fuel economy figures for four of its models, none of which were sold in the US.
Nissan essentially came to Mitsubishi's rescue, a decision made by now-former Renault-Nissan CEO Carlos Ghosn. Representatives from both Nissan and Mitsubishi refused to comment on the report. One possible reason why Nissan is considering the Mitsubishi sale is that the latter is expected to post an operating loss of $1.39 billion for the 2020 business year. Nissan may simply prefer to focus on its own recovery, especially in the vital North American and Chinese markets, instead of potentially pumping more money into a brand with its own series of problems.
In the US, Mitsubishi currently only sells two conventional cars and three crossovers. One of those crossovers, however, is the popular Mitsubishi Outlander and its plug-in hybrid derivative.
A completely redesigned Outlander, riding on the same platform underpinning the also-new Nissan Rogue, is expected to debut sometime next year. This platform-sharing plan likely wouldn't change if any sale takes place. But we should also stress Nissan may not sell its entire Mitsubishi stake, a scenario Mitsubishi would probably prefer.
Then again, Mitsubishi is Japan's sixth largest automaker and is strong in markets where Nissan is not, such as parts of Asia. It could be an attractive brand for potential buyers looking to expand their presence on that continent. For now, nothing is for certain and we're waiting for additional information to arrive.