Mitsubishi, Nissan agree on joint car venture

Ailing Japanese automaker Mitsubishi Motors Corp. has reached a basic agreement with Nissan Motor Co. to form a joint venture for mini-vehicle production, a Japanese newspaper said today.

The two automakers will establish a joint company with capital from both firms as early as next spring, the Mainichi Shimbun daily reported, adding that the new company would handle both development and production of mini-vehicles.

Mitsubishi Motors will include the tie-up in a revival plan to be compiled in mid-December and hopes it will lead to further links with Nissan in areas such as joint car development and procurement of auto parts, the newspaper said without citing specific sources.

Officials at Mitsubishi Motors and Nissan were not immediately available for comment .

Japan's only unprofitable carmaker, MMC is struggling to rebuild after former majority owner DaimlerChrysler AG gave up on it in April and after a defect cover-up scandal led customers to shun the brand.

Japanese media reported in October that Nissan and MMC had begun talks to form a venture dedicated to building mini-vehicles, which have engines of up to 660cc. The reports said the discussions included plans for folding in MMC's Mizushima plant, which produces the Pajero Mini, Clipper and other small trucks.

- REUTERS