February 27, 2008 / 7:51 AM / 10 years ago

Nissan and Mitsubishi Motors to expand vehicle ties

TOKYO (Reuters) - Nissan Motor Co and Mitsubishi Motors Corp said on Wednesday they would beef up cooperation in the supply of vehicles in a bid to save development costs in the increasingly competitive industry.

A man is reflected on a car from Nissan Motor Co at its showroom in Tokyo February 1, 2008. Nissan and Mitsubishi Motors Corp said on Wednesday they would beef up cooperation in the supply of vehicles in a bid to save development costs in the increasingly competitive industry. REUTERS/Toru Hanai

The Japanese automakers already have an agreement under which Mitsubishi Motors supplies 660cc minivehicles under the Nissan badge for sale in Japan, while Nissan is to build a light commercial vehicle (LCV) for its partner starting this autumn.

Under the expanded pact, Mitsubishi Motors will supply Nissan about 4,000 of its Pajero mini-sport utility vehicles annually for the domestic market, also from this autumn. It would be the fourth minivehicle model built for Nissan under an original equipment manufacturing (OEM) agreement.

The partners will consider further cooperation in LCVs, such as in the areas of development and production, they said in separate statements.

Automakers around the world have increasingly turned to OEM deals to fill gaps in their product line-ups more cheaply and quickly.

Last month, Nissan said it would supply a small car based on its Versa sedan to Chrysler LLC to be sold in South America. In Japan, Nissan also procures 660cc minivehicles from Suzuki Motor Corp, which has no extra capacity thanks to brisk sales.

Mitsubishi Motors, meanwhile, is looking to make use of its underutilized production facilities around the world as it aims to get back on a firm recovery track. It is due to announce a new midterm business plan on Friday.

Nissan, Japan’s third-biggest automaker held 44 percent by Renault SA, is aiming to strengthen its minivehicle line-up in Japan to make up for a sharp slide in other segments.

Reporting by Chang-Ran Kim; Editing by Hugh Lawson

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