DaimlerChrysler and Mitsubishi Motors to Form Alliance
27 March 2000
DaimlerChrysler to Acquire 34-percent of Mitsubishi Motors
Alliance Gives DaimlerChrysler Increased Access to Growth Markets in Asia
Juergen E. Schrempp: 'This alliance strengthens DaimlerChrysler's global
reach with the right product mix for growth markets'
Katsuihiko Kawasoe: 'For Mitsubishi Motors this is a great opportunity
to enhance our position outside Asia'
STUTTGART, Germany and TOKYO, March 27 DaimlerChrysler
Chairman Juergen E. Schrempp and Mitsubishi Motors (MMC) President Katsuhiko
Kawasoe signed a Letter of Intent in Stuttgart, Germany to form an alliance
regarding the design, development, production and distribution of passenger
cars and light commercial vehicles. The final contracts will be signed within
the next few months.
It has been agreed that DaimlerChrysler will acquire a 34-percent equity
stake for Euro 2.1 bn (Yen 450 per share) in MMC through a capital increase.
The combined unit sales and revenues of the partners ranks them among the top
three automotive companies worldwide.
With this alliance, DaimlerChrysler will strengthen its presence in Japan
and the Asian region. DaimlerChrysler Chairman Juergen E. Schrempp said:
"Mitsubishi Motors is the ideal partner to increase DaimlerChrysler's presence
in all parts of Asia. This is a milestone in DaimlerChrysler's Asian
strategy."
Mitsubishi Motors President Katsuhiko Kawasoe emphasized the significance
of the deal: "With this alliance, we gain access to additional resources.
DaimlerChrysler will add potential economies of scale and will enhance the
future of our business. We will be able to intensify our activities outside
Asia, primarily in Europe and North America. While Mitsubishi Motors will
essentially remain an independently managed company, we will be able to
combine our strengths in many areas and benefit from this alliance."
Mitsubishi Motors has an excellent distribution network throughout Asia
and some of the highest market shares in that region. In the fast growing
ASEAN countries, Mitsubishi Motors' 26-percent market share is the highest
among all competitors. DaimlerChrysler and MMC will have a combined market
share of about 10.8-percent in Japan and 9.4-percent in the other parts of
Asia Pacific.
DaimlerChrysler Chairman Juergen E. Schrempp stressed the importance of
this partnership for profitability expanding DaimlerChrysler's share of the
global small car segment, including the Smart brand. According to the
agreement, the two companies will cooperate on the development of a small car.
Schrempp continued: "The new alliance will help us expand the Smart brand
in the near future. In addition, it gives us access to growth markets in Asia
and beyond, such as Latin America and Eastern Europe, where DaimlerChrysler
will have the optimum product mix in the future."
Relating to the development of a small car, MMC President Katsuhiko
Kawasoe stated: "Mitsubishi Motors' European manufacturing operation,
Netherlands Car B.V., Nedcar, will become a 50/50 joint venture and the
development and production site for our future small cars for the European
market based on a common platform and GDI engine technology. We see a lot of
further opportunities especially in development of new products, engines, and
environmental technology, and we will start working on joint projects at full
speed."
According to the Letter of Intent, DaimlerChrysler and Mitsubishi Motors
plan to cooperate closely in the areas of development and design, purchasing,
manufacturing, and sales of passenger cars and light commercial vehicles, such
as pick-up trucks. However, the agreement excludes medium and heavy trucks
and other commercial trucks.
DaimlerChrysler will give Mitsubishi Motors access to its worldwide
financial services network. This will enable MMC, in addition to its own
activities, to offer financing and leasing of its products through the network
of debis Financial Services.
It has been agreed that the representation of DaimlerChrysler on the Board
of Management of MMC is in line with the equity participation. The board
members, who have not yet been nominated, will serve as regular board members.
Together with the influence associated with the 34-percent equity stake,
this will enable DaimlerChrysler to be part of the decision making process at
Mitsubishi Motors.
Media Call
Monday, March 27, 6:40 a.m. EST/1:40 p.m. CET/8:40 p.m. JST
Call-in number: 800-857-9800; passcode - "Partner"
Press Conferences:
Frankfurt: Monday, March 27, 4:00 a.m. EST/11:00 a.m. CET, Alte Oper
Internet http://www.daimlerchrysler.de/go/live
Tokyo: Tuesday, March 28, 3:00 p.m. TKY, ANA Hotel Tokyo