Mitsubishi Motors today said that it was in talks with PSA Peugeot Citroen to enhance their cooperation as a report said the French group would take control of the troubled Japanese carmaker.
Mitsubishi and Peugeot have been working on vehicle supply and future joint production in Russia but are negotiating a more comprehensive tie-up according to Mitsubishi spokesman Kai Inada.
He added that the two companies are in discussion on possible projects that could benefit both companies and a capital tie-up was one of the options. He added that nothing had been decided on whether they would go ahead with a capital alliance.
According to the Nikkei economic daily Peugeot was in the final stages of talks with Mitsubishi to effectively take over the Japanese company, which posted a first-half net loss of a little over $400 million even as global sales slumped.
Mitsubishi would likely issue ¥ 200-300 billion in new shares giving Peugeot a 30-50 per cent stake according to the daily which did not cite any sources.
While the deal would provide Mistubishi with a cash injection and Peugeot would be able to tap the Japanese company's expertise in electric vehicles and its network in emerging countries, the report said.