Mitsubishi, Merrill Lynch in Joint Venture
Monday, November 29th 2004, 10:28 am
By: News On 6
TOKYO (AP) _ Money-losing Japanese automaker Mitsubishi Motors Corp. said Monday that it is setting up a joint venture with the investment firm Merrill Lynch & Co. to offer auto-sales financing services in the United States.
Details of the deal were not decided, but Mitsubishi Motors also said it agreed to sell $2 billion of its U.S. credit company's $4 billion assets _ including leases and loans _ to Merrill Lynch, a spokesman at the Tokyo-based automaker said. The price was not disclosed.
Mitsubishi Motors Credit of America Inc. is a wholly owned subsidiary of Mitsubishi Motors North America Inc.
Mitsubishi Motors has been plagued by a series of defect-coverup scandals in Japan that have badly tarnished its image and sent sales plunging here.
But its sales and profits have also suffered in the United States, partly because it had sold too many cars to people with bad credit.
Mitsubishi Motors has previously said it would scrap the risky financing deals, cut jobs, trim production and reduce sales to rental and other fleets to make its U.S. business profitable.
President Hideyasu Tagaya has said his company is in talks with various companies to possibly work together on projects as Mitsubishi Motors embarks on a turnaround.
DaimlerChrysler AG of Germany decided to stop further financial help for Mitsubishi Motors earlier this year. Mitsubishi Motors has received cash from members of the Mitsubishi group of companies in Japan, which includes a bank, trading company, machinery maker and other major companies.