Nissan might invest $1.84B in play to take over Mitsubishi Motors

Nissan Motor Co. might invest more than 200 billion yen ($1.84 billion) in a play to take over Mitsubishi Motors Corp., which has been battered by a scandal over falsified fuel-economy ratings, Japanese broadcaster NHK reported.

Nissan is in the final stage of talks to effectively acquire Mitsubishi Motors by taking a 34 percent stake, NHK said. Mitsubishi will probably issue new shares to sell to Nissan in a private placement, Nikkei reported, adding that the automakers are expected to hold board meetings on Thursday to decide on the tie-up.

"There is a logic to Mitsubishi Motors needing a partner, since they clearly don't have the engineering resources to be a player in a world where technology is moving so quickly," said Maryann Keller, an independent auto analyst in Stamford, Conn. "They've always been an also-ran in major markets like the U.S. But they actually have a decent business in Southeast Asia, so they have some attractive assets."

Mitsubishi, which admitted last month to cheating on the fuel ratings, said on Wednesday that nine more models including a sport utility vehicle may not have been properly tested as the scandal spreads beyond the initial batch of minicars.

Orders for Mitsubishi vehicles in Japan have plunged after the company first revealed it had overstated the fuel economy of its minicars by as much as 10 percent.

The scandal has also affected Nissan, which sold two of the minicar models under a partnership agreement.

Nissan wasn't involved in setting the fuel-economy targets for the minicars in question, Mitsubishi Motors President Tetsuro Aikawa said at the briefing.

Mitsubishi had raised the fuel-economy targets five times for the minicar models to 29.2 kilometers/liter from 26.4 km/l in a bid to outperform the competition.

Mitsubishi Motors hasn't sought support from Mitsubishi group companies and aims to solve the crisis on its own, Chief Executive Osamu Masuko said at a Wednesday press briefing in Tokyo. The company should be able to handle compensation with its own resources, he said.