Mitsubishi Motors To Sell 22% Stake In Fuso To Daimler

TOKYO January 15, 2004; Yoshio Takahashi writing for Dow Jones reported that Mitsubishi Motors Corp. said Thursday it will sell a 22% stake in its truck and bus manufacturing unit to DaimlerChrysler AG for about Y52 billion.

The sale of the stake in Mitsubishi Fuso Truck and Bus Corp. will be completed by the end of March, Mitsubishi Motors said.

Mitsubishi Motors said the sale won't affect its earnings forecast for the current fiscal year. The automaker will use the proceeds to invest in the development of new models as it tries to become more aggressive in launching new vehicles amid a slump in its U.S. operations.

The Japanese carmaker, 36%-owned by DaimlerChrysler, projects a group net loss of Y11 billion for the fiscal year through March after sustaining a net loss of Y80.22 billion in the first half.

The loss forecast comes after write-offs of bad auto loans in the U.S. It had offered relatively easy credit terms on car loans to attract customers amid intensified competition. Its U.S. sales tumbled after it tightened the credit criteria.

Under its new products plan, the company aims to roll out 14 new models in Japan and the same number of new models in Europe over the five years to 2007. It plans to launch 12 new models in the NAFTA or North America Free Trade Agreement market and further 12 new models in the rest of the world.

Mitsubishi Motors' stake in Mitsubishi Fuso will fall to 20% from 42%, while DaimlerChrysler's share of the truck and bus company will rise to 65% from 43%. The remainder is held by Mitsubishi group companies.

The announcement comes after The Wall Street Journal reported last month that Mitsubishi Motors was negotiating with DaimlerChrysler and other Mitsubishi group companies to sell all or most of its 42% stake in Mitsubishi Fuso, citing a person familiar with the negotiations.

A Mitsubishi Motors spokesman declined to comment on whether it will sell its remaining 20% stake and said his company is considering a variety of options.