Nissan and Mitsubishi have outlined details of their joint venture to develop minicars for the Japanese market.
Based in Takanawa, Minato Ward, Tokyo, the new JV, known as NMKV, started operations on 1 June and has 35 employees.
A statement from Mitsubishi said the new operation would integrate the product planning and engineering of future minicars for Nissan and Mitsubishi in the Japanese market by “harnessing the product planning know-how possessed by each company.”
More than a third of new car sales in the Japanese market come from the minicar segment as the demand for smaller vehicles and eco-cars remains strong.
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The statement added: “The JV will benefit Mitsubishi by supplying highly-competitive products to its product line-up and by offering increased economies of scale advantages through Nissan’s purchasing capacity.”
The establishment of NMKV added Mitsubishi, is part of the project to expand the scope of business collaboration both companies agreed to in December last year.
NMKV executives told a news conference in Tokyo on Monday they would launch their first jointly developed minivehicle for the Japanese market in the first half of fiscal 2013.
The vehicle would be a successor to Mitsubishi Motors’ mainstay EK-Wagon minicar, which is also sold by Nissan as the Otti under an original equipment manufacturing deal.
The two automakers will jointly develop a new platform and engine for the new minivehicle, Kyodo News reported.
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By GlobalData”We’d like to lift the share at least to 20%” in the minivehicle market from the current combined share of around 15 percent, NMKV president and chief executive officer Junichi Endo said at the news conference.
The new Tokyo-based company aims to take third position in the minivehicle market, behind Daihatsu and Suzuki.
On expansion to overseas markets, Endo said he thought there was demand for small cars in emerging markets such as Asia which other automakers have already entered.
”I think there are considerable chances. We’d like to consider them positively,” he said.
Minivehicles – smaller than compact cars with a maximum length of 3.4m, width of 1.48m and engine displacements of up to 600 cc – account for over 30% of Japan’s vehicle market.
The vehicles, which are priced around JPY800,000 to JPY1.2m, have been drawing steady demand despite weak sales in Japan’s new vehicle market due to their lower tax burden compared to standard sized cars and high fuel efficiency, Kyodo noted.
