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November 05, 2013 12:00 AM

Renault-Nissan expand Mitsubishi tie-up to building new sedans and an EV

Hans Greimel
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    TOKYO — Mitsubishi Motors Corp. will sell a Renault-based mid-sized sedan in the United States under a new strategic tie-up between Mitsubishi and the Renault-Nissan alliance.

    The car will be the first of two Renault-based sedans sold by Mitsubishi under a product and technology exchange announced by the companies today. The cooperation also includes joint development of an electric car and a new compact car, both to be sold globally.

    Renault-Nissan and Mitsubishi will "explore several new projects covering shared products, technologies and manufacturing capacity," the three automakers said today in a joint statement.

    The large sedan, which was not named by the companies, will made at a Renault-Samsung plant in Busan, South Korea. The car will also be sold in Canada.

    The second sedan would compete in the global compact segment. "The manufacturing location for this product is under discussion," the statement said.

    The companies did not announce the timing of either launch. Mitsubishi spokeswoman Namie Koketsu could not say whether the compact sedan would be sold in the United States.

    "Nissan and Mitsubishi have jointly benefited from several collaborations in the past," Carlos Ghosn, CEO of both Renault and Nissan said in the statement. "I welcome the direction being taken toward this broader cooperation, creating new opportunities for Renault in addition."

    Maximizing capacity

    The deal will put a Renault-based vehicle in the United States and help bolster a beleaguered Mitsubishi lineup that is short on new vehicles, especially sedans.

    Renault left the United States in 1987 after it sold its interest in American Motors to Chrysler Corp.

    The agreement also builds upon several product exchanges between Renault-Nissan and Mitsubishi, as the companies seek partners to maximize plant capacity and cut costs through volume.

    Renault-Nissan have been looking for ways to lift output at the alliance's underutilized South Korean factory. The plant is already scheduled to make Nissan vehicles for the U.S. market next year, and the Mitsubishi supply will add more work.

    Mitsubishi, which will announce a new mid-term business plan on Nov. 6, is expected to seek more such deals to help boost a thin global portfolio as the company's recovery gathers speed.

    It was unclear whether the Mitsubishi sedans would be based on existing Renault Samsung vehicles or newly developed ones.

    Renault Samsung spokeswoman Jang Yoonseon said the companies are still discussing which Renault cars will be used as the base.

    In South Korea, the SM7 sits atop the Renault Samsung lineup as its top-tier sedan. The SM5 is its mid-sized counterpart. The SM7 is sold as the Renault Talisman in other markets, while the SM5 is sold as the Renault Latitude. The plant also makes two other vehicles, the SM3 small sedan and QM5 crossover.

    Renault Samsung has only one assembly plant, in the southeastern port city of Busan. It has annual capacity of 300,000 units, but churned out only 130,000 last year, Jang said. Its South Korean sales totaled about 60,000 in 2012.

    To soak up more of that capacity, Ghosn has moved some output of the Nissan Rogue crossover to the plant. It will enter production there in the second half of 2014 with target output of 80,000 vehicles, mostly earmarked for the Untied States.

    As part of the deal, the companies also aim to share technologies and "product assets" related to electric vehicles and recent product platforms.

    Nissan is the global market leader in electric vehicles, with its Leaf EV, while Mitsubishi, which markets its own EV called the i-MiEV, has made EVs and hybrids a central pillar of the company's mid-term business plan.

    Mitsubishi and Nissan will further cooperate on a new small car to be sold globally. That project will also deliver an electric version of the car.

    The car will be based on a jointly developed platform for Japan's minicar segment, a type of car restricted in overall dimensions and restricted to engines no bigger than 0.66-liters.

    Nissan and Mitsubishi will extend their existing NMKV minicar joint venture, which was launched in 2011. Its first products are the Nissan Dayz and Mitsubishi eK wagon minicars, both of which went on sale this year in Japan.

    "The new opportunities could be described as evidence that the ongoing collaborative projects between Mitsubishi Motors and Nissan have brought positive results," Mitsubishi President Osamu Masuko said in a statement. "Mitsubishi Motors hopes that any new collaborative projects with the Renault-Nissan alliance would bring us further merits."

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