Mitsubishi and Volvo Arrange Cut Deals

12/26/96

Nikkei English News has reported that Mitsubishi announced that it had made arrangements with Volvo whereby both carmakers will sell the other's cars in either Europe or Asia, and collaboratively develop fuel-efficient engines. Both of the carmakers currently use their own brands to sell subcompact passenger cars made by their Dutch joint venture, NedCar.

Volvo Truck Corp. will begin to sell small trucks that Mitsubishi makes in Portugal, while Mitsubishi will sell large Volvo-made trucks in Asia. The companies will implement the joint sales arrangement in Fall 1997. The companies have not yet decided how many trucks will be involved in the arrangement.

Mitsubishi and Volvo have also announced that they will spend 100 billion yen to jointly develop a direct-injection diesel engine with a range of more than 30km per liter of diesel fuel. Mitsubishi will license its new gasoline direct injection engine to Volvo.

Finally, the two firms have also pledged to cooperatively develop a subcompact passenger car that NedCar will launch in the year 2000. They will provide each others' plants around the world with transmissions and other key components.

Paul Dever -- The Auto Channel