DaimlerChrysler is planning to move quickly to complete the assimilation of Mitsubishi Motors into its global operation, writes Paul Gover.
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DaimlerChrysler took a 34% stake in the troubled Japanese carmaker earlier this year, a move which also gave it the choice of chief operating officer, but is looking for more.
Dr Eckhard Cordes, the DaimlerChrysler board of management member responsible for Asia, said in Melbourne on Saturday (9/12/00) that the only barrier to a total early takeover was Mitsubishi’s debt.
“The Mitsubishi participation is 34%, which will be increased as soon as possible,” Dr Cordes said.
“What will define when we can do it, regarding Mitsubishi, is when their financial performance has improved. Because we don’t want to be forced to consolidate, fully consolidate, Mitsubishi with the debt burden they sit on.”
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By GlobalDataHe said DaimlerChrysler is currently working on Mitsubishi’s role in its global strategy, with a report and recommendations due in the first quarter of 2001.
And he suggested that joint Mitsubishi-Chrysler retail dealerships in Europe were one likely outcome.
DaimlerChrysler’s Asian expansion this year has also included a 10% chunk of Hyundai Motor Company, but Dr Cordes said this was a very different move to the controlling stake in Mitsubishi.
“They were looking for a partner, thinking ‘Maybe long-term we are not strong enough to survive’. They have been smart,” Cordes said.
“Financial participation in Hyundai is a very good investment. The recommendation from the financial analysts is to buy.”
He admitted DaimlerChrysler was looking for access to cheap commercial vehicles, with a 50-50 link on that side, but that the rest of DaimlerChrysler’s plan is longer term and had a variety of objectives.
“The Hyundai case has to be looked at in a different way, because there are several aspects to it,” he said.
“Hyundai is much more solid long-term orientation. And you have to differentiate here between commercial vehicles and cars.
“On commercial vehicles it’s a merger of equals for Korea. In the car sector, it’s very much of a long-term orientation.
“Firstly, when you want to market your own vehicles in Korea you need a local partner. Second thing, Hyundai makes good products. And, third thing, they are very profitable. They have tripled profits this year over last year.
“Hyundai is not linked any more to the Hyundai conglomerate, they are totally separate and they have quite good technical know-how when it comes to small cars. And maybe they can help us in that respect and we can help them in some areas.
“Maybe we meet again in 10 years and discuss Hyundai.”
