DaimlerChrysler may announce the purchase of a controlling stake in Mitsubishi Motors as early as this week - and the deal is set to trigger a reappraisal of Mitsubishi's operations in Europe.
Leading the list of potential changes are the sale of Ford's 50 percent share of the NedCar plant in the Netherlands to DCX, and the closure of the Pajero Pinin SUV operation at Pininfarina in Italy.
Last Wednesday, the Mitsubishi board gave President Katsuhiko Kawasoe a free hand to negotiate his company's fate with DCX. Kawasoe has been talking with DCX Chairman Jurgen Schrempp over a deal that would give the German carmaker 33.4 percent of Mitsubishi. 'This sounds like a done deal,' said Takaki Nakanishi, auto analyst at Merrill Lynch Japan. A final agreement is expected to be signed in May.
Under Japanese law, a 33.4 percent stake gives its holder veto power over board decisions.
DCX is planning to follow up the Mitsubishi deal by acquiring Ford's 50 percent stake in Dutch plant NedCar, said sources in Japan. NedCar builds the Volvo V40/S40 alongside the Mitsubishi Carisma and SpaceStar. The move could pave the way for the future sharing of platforms by Chrysler and Mitsubishi at NedCar.
Ford would welcome the chance to move Volvo production out of NedCar and into another plant to help cut its overcapacity problems in Europe. The Volvo S40 replacement - due in 2004 - is likely to share a platform with the next Mondeo.
The agreement between DCX and Mitsubishi will also likely lead to the end of Mitsubishi and Fiat's deal to produce the small Pajero Pinin SUV in Italy.