News that Peugeot/Citroen is discussing a stake in Mitsubishi, possibly as big as 50 per cent at a cost of around £1.5 billion, marks yet another stage in the wave of consolidation sweeping the car industry.
At several levels, I think this could work for both partners. In particular it could be the lifeline that Mitsubishi Motors needs to develop a more independent strategy outside the Okeiretsu of Mitsubishi companies that saved it from closure when Daimler-Chrysler's global ambitions collapsed in 2004.
PSA eyes Mitsubishi stakeMitsubishi is still supported by the four group companies that together own around 34 per cent of Mitsubishi Motors.
In fact Mitsubushi Heavy, the engineering arm that owns 15 per cent, has just help fund a new range of 1.8 and 2.0-litre diesels that we'll first see in the RVR soft-roader next year and will then replace the VW unit in the Lancer and Outlander.
And Mitsubishi's i-MIEV is powered by batteries developed by the Lithium Energy Japan, a company controlled by Mitsubishi Corporation, the second biggest shareholder in Mitsubishi Motors.
Incestuous to say the least.
Despite this, MMC is still heavily indebted and losing money against a background of a grim economic outlook, in the home market particularly.
And in the medium term it needs to find a partner to develop the new Lancer and, given that one analysts report I've just looked at suggests Mitsubishi Motors only spends around £300m a year on R&D, that's going to be very important.
PSA will get a lot out of this, too. Mainly there's access to the lithium-ion technology. I think this is the first time that EV technology has been a significant driving force behind a strategic tie-up in the auto industry.
Then there's access to markets where PSA is weak - Asia and to a lesser degree Russia.
And it also moves PSA into the second tier of global car-makers. Put PSA's 3m cars a year together with Mitsubishi's 1m and you get a 4m-sized car company comparable with Honda and knocking on the door of Ford/Mazda.
But the big question that remains is how will this co-operation work in practice? And can PSA actually get Mitsubishi to do the things it wants?
So far the much-touted examples are of re-badging jobs of each other cars - Outlander/4007, i-MIEV/iON. Those are a far cry from an engineering co-operation where compromise is required on a daily basis.
Also, what will Toyota think about this? Maybe a decision has already been taken to end the Aygo/107/C1 co-operation? A new one of those is due around 2012/13.
In the example of a western/Japanese merger working well - Renault-Nissan - the Japanese partner was bankrupt and burned out, which made the job of the incoming westerners much easier.
Mitsubishi has seen partners/owners come and go in the past, Chrysler twice, and the Daimler fiasco, I wonder whether the culture there is ready for more interference from outside, even if it is much needed?
Lots of questions and, so far, not many answers.
