TOKYO — Rumor that Nissan is eyeing unwinding its controlling stake in Mitsubishi Motors Corp. comes at a delicate moment for the junior partner of the three-way alliance with Renault.
Mitsubishi is mired in red ink and just embarked on a joint strategy with Nissan and Renault to carve up international markets in a scheme that greatly reduces its global footprint.
And any unwinding could cut loose the smaller player — which sells just a fifth of Nissan's worldwide volume — at a time when industry wisdom holds that consolidation is a key to success.
Executives at both companies scurried to do damage control after Bloomberg News reported this month that Nissan was exploring ways to sell all or part of its controlling 34 percent stake in Mitsubishi. Nissan bought the stake in 2016 under a deal brokered by then-Nissan Chairman Carlos Ghosn and his counterpart at Mitsubishi, Osamu Masuko.
Both men are now gone. Ghosn was arrested in 2018, indicted in Japan on various financial misconduct charges and drummed out of the industry. Masuko died of heart failure in August.
According to the Bloomberg report, which cited unnamed sources, Nissan is pondering a sell-off partly to generate cash as it tries to dig itself out of two straight years of losses. The report said lingering question marks were who would buy the stake and whether Nissan could stomach a huge loss on the sale.
Bloomberg said Nissan's Mitsubishi holding is currently worth $950 million — less than half of what it paid.