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Old 26th April 2016, 15:30   #1
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Default Mitsubishi: A prime takeover target for Tata or Mahindra? EDIT: Nope it's Nissan!

Hello,

So all this is hypothetical, no one is taking over anyone so far. That said, bear with me.

So people must have heard about the Mitsubishi mileage scandal by now, followed by the obvious fall in share prices. This is not the last of it and there is plenty more to come, fines, litigation, recalls etc..etc... That said in all this ruckus I smell an opportunity, as well all do our best procrastination on Monday mornings. My case is this, Tata or M&M should buy a majority stake in Mitsubishi, when the shares are down. The reasoning is as follows:

TATA

Tata's jewel in the crown is JLR. A fast growing premium car manufacturer that is on its model expansion spree. The issue is that is only one end of the market. In the other end Tata's own brand of passenger vehicle's aren't exactly setting sales charts on fire. Global exports are insignificant.

How does owning Mitsubishi help?

Firstly it can help turning their domestic fortunes around. Badge engineering future line ups under Mitsubishi can help Tata battle its poor brand reputation and perhaps even improve margins. I understand Mitsubishi is no Honda, but they are on a far better footing than Tata. A revamped Sales and Service network under the Mitsubishi brand might be the domestic rebirth Tata was looking for.

Secondly, it opens them up to the international car market with an affordable brand. Brands like the Pajero, Shogun, Lancer, Colt have very good brand recall. New models can be spinned of exiisting or older JLR platforms. Mitsubishi is still quite strong in the Sport and commercial Utility markets. From a fringe global player in the mass market, Tata and Mitsubishi together can carve a bigger niche.


Third, Mitsubishi has strong R&D that can be utilized, especially for tried and trusted electric and hybrid technology.

Cons: Mitsubishi has been struggling with sales and the new scandal will not help. They have no presence in the massive US market, but JLR can help here. It is capital intensive and Tata will increase their debts, but I think its well worth it.

MAHINDRA

Mr.Anand Mahindra must rue letting the chance to buy JLR go by. It is now a well known rumour that M&M are looking to establish globally by ways of acquiring new firms eg. SsangYong.

Unlike SsangYong Mitsubishi has a much better global reach. In addition to the above mentioned points for Tata, all theree brands i.e. Mahindra, SsangYong and Mitsubishi are synonymous with SUVs. Mitsubishi can help expand Mahindra's global presence overnight.

Cons: Both SsangYong and Mitsubishi are absent in the US.
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Old 26th April 2016, 19:39   #2
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Default re: Mitsubishi: a prime takeover target for Tata/M&M ?

Tata group is still reeling from the Corus acquisition. Not sure if they can add more debt to the pile. Also with JLR, they have all the SUV cred needed.

I guess this may be a better opportunity for Mahindra. Pajero brand itself is good enough reason I guess. All of this speculation comes down to pricing and liabilities - The cheating scandal may take some time to settle and it may be difficult to put a number on the liabilities including fines in short term. They may have to wait till the regulators in different countries make a decision.
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Old 26th April 2016, 19:47   #3
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Default re: Mitsubishi: a prime takeover target for Tata/M&M ?

Quote:
Originally Posted by manoj_joseph78 View Post
I guess this may be a better opportunity for Mahindra. Pajero brand itself is good enough reason I guess.
+1 to that!! I would also like to see Mitsubishi products under the Mahindra stable. Pajero Sport is one awesome SUV, only to be let down by its brand. Mahindra is also perceived as a SUV manufacturer more than any thing else. And guess what, Mahindra's fondness for model names ending with "O" is also satisfied if the get access to the PajerO. Its like a match made in heaven!!

Regards,
Shashi
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Old 26th April 2016, 19:59   #4
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Default re: Mitsubishi: a prime takeover target for Tata/M&M ?

Interesting Idea especially for Mahindra. They may stand to gain a lot from this.
Knowhow to build a proper SUV being one (Something like the Pajero Sport) which will be equally competent on and off road.
Something like that could really take the fight to the Fortuner/ Endeavour.

Better still they may learn how to make good cars and Mitsubishi's advances in the electric/ hybrid fields may be a shot in the arm for Mahindra to really make cleaner/ hybrid vehicles (not the pseudo hybrids we get now).

Last but not the least, maybe someday we may get a more affordable Lancer Evo
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Old 26th April 2016, 21:04   #5
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Default re: Mitsubishi: a prime takeover target for Tata/M&M ?

More than the SUVs, what both Tata & Mahindra stand to gain is the RnD Mitsubishi has done while making their iMiev EVs and the Outlander Plug-In Hybrid Electric Vehicle which is one of their bestsellers across Europe.

Mitsubishi is already down in the dumps and already has all that wealth of knowledge in the EV sphere essential to practically all the manufacturers going into the future. I wouldn't be surprised is if some unknown copycat company from China comes forward and goes ahead with the purchase.
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Old 26th April 2016, 21:25   #6
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Default re: Mitsubishi: a prime takeover target for Tata/M&M ?

It's not so easy to acquire a Japanese company, due to their complicated cross-holdings (Keiretsu) and ownership by banks, that to an outsider appears to be designed explicitly to prevent takeover attempts by foreigners.

If they can, good luck to them.

For Tata, if it were possible, I think the best fit would be Mazda, with Izuzu getting an honorable mention. Tata can easily either of those companies if it really wanted to acquire them.
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Old 26th April 2016, 21:39   #7
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Default re: Mitsubishi: a prime takeover target for Tata/M&M ?

Quote:
Originally Posted by shortbread View Post
Cons: Both SsangYong and Mitsubishi are absent in the US.
Not sure why you would say that about Mitsubishi. Mitsubishi has been present in the US for ever. They have a manufacturing plant in Illinois, that is going to be shutdown this year. But, they will continue to sell their vehicles. The Evo has a cult following in the US. http://www.mitsubishicars.com/
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Old 26th April 2016, 22:03   #8
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Default re: Mitsubishi: a prime takeover target for Tata/M&M ?

Brilliant thought I'd say! Given the choices, M&M acquiring Mitsubishi will be better for both the brands I believe. TATA is struggling to re-build their own brand right now & taking Mitsubishi will only add to the burden. Am sure TATA wouldn't want to carry an additional baggage at the wrong time.

On the other hand, Mahindra has a better reputation on A$$ too & they hopefully can sell the Mitsu products better. Not to speak of the ideal SUV line up. This should be an opportunity for Mahindra to acquire a global brand after narrowly missing on the Aston Martin deal, if this works that route. A whole lot strike out buying a Pajero due to hopeless Mitsu A$$, am sure the same bunch will pick the product without battling an eyelid, if M&M is handling it.
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Old 26th April 2016, 22:04   #9
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Default re: Mitsubishi: a prime takeover target for Tata/M&M ?

Mitsubishi is very much there in the US. There are tonnes of evos and eclipses everywhere. Even gallant did well in their heydays. Yes their sales of late are dwindling badly but it is untrue that they do not have a presence.

I certainly do think Mahindra should pick up Mitsubishi motors. They were once associated with them for the ill fated Voyager aka L200. They would definitely appreciate Mitsubishi's SUV expertise.

Last edited by reignofchaos : 26th April 2016 at 22:06.
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Old 26th April 2016, 22:05   #10
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Default re: Mitsubishi: a prime takeover target for Tata/M&M ?

Buy shares of Mitsubishi Motors, OK but from where and whom? Mitsubishi Motors is a part of the privately owned conglomerate known as Mitsubishi Group. Founded in 1870, as of 2010 this group had an on record turnover of US $250 billion & net profit of US $8 billion. Their profit alone is more than the turnover of the companies that you mention. Besides that Mitsubishi Motors and its group companies have intracompany holdings so complicated that a true Marwari business house would be proud of. They may be down but they are not out, learn some more about them and you will be surprised by the depth of their roots.

Of course in this World anything is possible and if the Mitsubishi group decides as such, they could let it go but letting go is not something that this group founded by Iwasaki Yataro is known for.

Oh, regarding your titbit about Mitsubishi being absent from the US, you are mis informed. They are very much there, alive and kicking. In fact the Cedia that was sold here was also concurrently sold in the US markets too and quite a few of us Cediazens buy parts for our cars from the various US based websites as these are direct fit and cheaper and better quality compared to locally available parts.

Ciao


Quote:
Originally Posted by shortbread View Post
So people must have heard about the Mitsubishi mileage scandal by now, followed by the obvious fall in share prices. This is not the last of it and there is plenty more to come, fines, litigation, recalls etc..etc... That said in all this ruckus I smell an opportunity, as well all do our best procrastination on Monday mornings. My case is this, Tata or M&M should buy a majority stake in Mitsubishi, when the shares are down.


Cons: Both SsangYong and Mitsubishi are absent in the US.
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Old 27th April 2016, 01:03   #11
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Default

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Originally Posted by jkdas View Post
Phew ! drama @ Team-BHP too?

The thought of acquiring Mitsubishi Motors is too far fetched, but on a realistic front-

I would like to see Mahindra tie up with Mitsubishi for sales and distribution in India.

Currently they have ruined the brand name with Hindustan Motors and a tie up with Mahindra could provide the much needed boost. And as for Mahindra, it could provide a good image boost and product lineup above the current flagship - XUV 5OO.
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Old 27th April 2016, 01:19   #12
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Default re: Mitsubishi: a prime takeover target for Tata/M&M ?

If Mitsubishi ever do decide to sell then M&M should be first on the market to purchase. If not, they should propose that they will take their marketing and servicing forward. It is a win-win for both parties. Mitsubishis suddenly start selling again and Mahindra gets additional income and servicing knowledge which is then useful going forward in their R&D of new vehicles.
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Old 27th April 2016, 11:15   #13
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Default re: Mitsubishi: A prime takeover target for Tata or Mahindra? EDIT: Nope it's Nissan!

This is quite unlikely to happen.
First of all, Mitsubishi motors itself is in pretty bad shape. Out dated cars, declining market share and now this scandal. They also suffer from a not so favourable reputation in the states and I think that they will wind up pretty soon. Mitsubishi just isn't competitive enough to survive globally. But I don't think they would go the Daewoo way anytime soon and even if they do, they would prefer their owners to be Japanese and not Indians.
The Mitsubishi group is pretty enormous and would save Mitsu motors from foreign ownership.
Besides, i don't see Indian firms gaining a lot from this either as Mitsubishi's presence outside Asia is weak and buying the whole company for the pajero brand in India wouldn't make much sense.
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Old 27th April 2016, 15:55   #14
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Default re: Mitsubishi: A prime takeover target for Tata or Mahindra? EDIT: Nope it's Nissan!

Agreed 100% with Doge. Mitsubishi is too weak and has nothing to offer to Tata or Mahindra. They keep discontinuing product lines because they have no money to develop new ones. Heck, the Montero is now 20 years old!

Quote:
Originally Posted by shortbread View Post
Badge engineering future line ups under Mitsubishi can help Tata battle its poor brand reputation and perhaps even improve margins.
Tata is very, very proud of its name. There is no way they'll rebrand a Bolt or Zest as a Mitsubishi. Not like Mitsubishi has any real brand value in the mass market either.

Quote:
Third, Mitsubishi has strong R&D that can be utilized, especially for tried and trusted electric and hybrid technology.
EV technology can be bought; why buy an entire company for that? Also, EVs are no longer rocket science. Mahindra has its own EV division (E2O anybody?).

Quote:
Originally Posted by nmenon View Post
Knowhow to build a proper SUV being one (Something like the Pajero Sport) which will be equally competent on and off road.
Something like that could really take the fight to the Fortuner/ Endeavour.
With the XUV500, Mahindra has already proven that it knows how to build a good premium SUV.

Quote:
Originally Posted by prasadee View Post
Mitsubishi has been present in the US for ever.
Quote:
Originally Posted by reignofchaos View Post
Mitsubishi is very much there in the US.
Mitsubishi might be there in the USA, but their position is awful. They sell less than 10,000 cars a month in the largest market of the world, and most people buying a Mitsubishi do so because of discounts or bad credit - related article. It's at the bottom of the pile there.

Quote:
Originally Posted by CrAzY dRiVeR View Post
I would like to see Mahindra tie up with Mitsubishi for sales and distribution in India.
Mahindra is in the business of making & selling its own cars, not merely selling someone else's cars (Rexton doesn't apply as they own SsangYong). Also, why would they sell an SUV that potential customers of the XUV500 might be tempted to upgrade to in the same showroom?
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Old 27th April 2016, 16:22   #15
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Default re: Mitsubishi: A prime takeover target for Tata or Mahindra? EDIT: Nope it's Nissan!

This discussion took me to Google, to search for Mitsubishi. I was not surprised to see that, they know how to come out of difficult times, as mergers, acquisitions and selling is part of Mitsubishi for decades.
For eg:Mitsubishi Fuso Truck and Bus Corporation is separate from Mitsubishi Motors, which builds commercial grade trucks, buses and heavy construction equipment, and is majority owned by Daimler AG .
So, whatever said and done, the chance of an Indian company owning Mitsubishi is very remote.Actually, they don't need to. There are other groups to take up their cause.
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