20 April 2004

DaimlerChrysler could become the first foreign company to own a Japanese manufacturer outright. The company is due to increase its stake in the loss-making Mitsubishi Motors subsidiary from 37 per cent to more than 50 per cent, as part of a big shake-up due to be announced at the end of April.

Andreas Renschler – currently head of DC’s Smart division and tipped to replace Mitsubishi chairman Rolf Eckrodt – is expected to reveal the sweeping recovery plan at the end of the month that could see the ailing marque receive an injection of up to £2 billion by 2006.

If approved, this plan will see a major restructuring of the Mitsubishi production facilities (including the closure of underperforming factories), a more streamlined model range and an increase in cost-saving platform sharing with sister companies Chrysler, Mercedes and particularly Jeep, with its SUV expertise.

The injection of funds is likely to come mainly from the sale of preferred shares to stakeholders (including DaimlerChrysler itself), bank loans and investment from other members of the Mitsubishi Group.

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