Daimler targets Mitsubishi stake

TOKYO, Japan (CNN) - Mitsubishi Motors soared on Monday after DaimlerChrsyler's Chief Executive said the company plans to take a majority stake in Japan's fourth-largest car maker.

Juergen Schrempp said Mitsubishi had to return to profitability and reduce its 13 billion euro debt before DaimlerChrysler would raise its current 37.3 percent stake to more than 50 percent.

Mitsubishi rose 9 percent to close at 412 yen in Tokyo trading on Monday. DaimlerChrysler (FDCX), the world's third-largest carmaker, slipped 0.5 percent to 50.25 euros in midday Frankfurt trading.

"This (taking over the majority in Mitsubishi) is obviously our long-term goal,'' Schrempp told German magazine Der Spiegel in an interview made available ahead of publication.

Daimler, which has its hands full trying to turn around loss-making U.S. unit Chrysler, has been criticized for its attempt to build a global car conglomerate. Daimler's stock is worth less than half its peak price when its merger with Chrysler was announced in 1998.

The wisdom of its planned partnership with Mitsubishi has also been called into question.

Schrempp said DaimlerChrysler's decision to form an alliance with the Japanese car maker meant it would not be forced to take on Mitsubishi's debt.

"So far we own a 37.3 percent stake and we can take the majority in 2003 at the earliest. But first Mitsubishi has to be profitable again and has to reduce its debt,'' Schrempp said.

Newspaper Die Welt said on Thursday that it had learnt DaimlerChrysler's sales had risen 9 percent to 23.4 billion euros ($20.7 billion) in January and February compared to the previous year. It said sales were especially good in the United States.

DaimlerChrysler is expected to face a barrage of criticism from small shareholders on Wednesday over its performance in the last year.

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