TOKYO - It would not be surprising if AB Volvo, the new parent of Renault's truck unit, ignores Nissan Diesel in favor of doing business with Mitsubishi Motors' truck unit.
The relatively strong performance of the Mitsubishi unit, Mitsubishi Fuso Truck & Bus Co., makes the situation at troubled Nissan Diesel Motor Co. look even worse.
Both companies are battling through the worst Japanese medium- and heavy-duty truck market in more than 30 years, with industry volumes barely half that of the peak one decade ago. But their fortunes are vastly different.
Mitsubishi Fuso President Yuzo Murata predicts the truckmaker will post a group, or worldwide, pretax profit of $190 million for the fiscal year that began April 1.
Nissan Diesel forecasts it will return to profitability by the fiscal year ending March 31, 2003, but won't say by how much it will nudge into the black.
That year, Mitsubishi Fuso expects to post a group pretax profit of $524 million.
Mitsubishi Fuso holds long-term debt of about $3.8 billion, compared with Nissan Diesel's $4.6 billion. Mitsubishi Fuso plans to cut that to $2.6 billion over three years. Nissan Diesel plans to cut its debt to $3.8 billion over five years.
Mitsubishi Fuso has several distinct advantages over Nissan Diesel. It has been the market leader in Japan since it claimed that title from Isuzu Motors Ltd. back in 1996. Nissan Diesel is fourth among Japan's four truckmakers.
The only segment in which Nissan Diesel leads is dump trucks.
Moreover, the Fuso brand arguably has a stronger brand identity than either Nissan Diesel's 'UD' or Mitsubishi's own brand for passenger cars.
Mitsubishi Fuso has benefited from Mitsubishi's Renewal Mitsubishi 2001 restructuring program in the past several years by cutting both manufacturing and office staff, reducing debt and closing lines and factories.
Mitsubishi Fuso will be spun off from the parent, Mitsubishi Motors, by the end of the year. Swedish truckmaker AB Volvo will take 19.9 percent ownership of the new unit.