Daimler seen taking role in Mitsubishi truck unit


Rolf Eckrodt was named CEO and president of Mitsubishi Motors in June

Staff and reports

TOKYO, Japan (CNN) -- Germany's DaimlerChrysler will expand its influence in Japan's Mitsubishi Motors group by taking a stake in the truck and bus unit scheduled to be hived off next year, according to a Japanese media report Thursday.

DaimlerChrysler is already the major shareholder in Mitsubishi Motors, with a 37.3 percent stake.

German executive Rolf Eckrodt runs the automaker, which ranks No. 4 in Japan behind Toyota, Honda and Nissan.

Eckrodt was appointed CEO and president in June this year. Before that he was chief operating officer of Mitsubishi's car unit.

In March this year, reports first surfaced that Mitsubishi Motors would spin off its commercial truck and bus division early in 2003 into a joint venture with DaimlerChrysler.

Likely to invest 80 billion yen

The Nihon Keizai business daily reported at the time that DaimlerChrysler would take a 30 percent stake in the venture.

But on Thursday, the newspaper said DaimlerChrysler was now likely to spend 80 billion yen ($678 million) to acquire a 40 percent stake.

According to the Nikkei, Mitsubishi will transfer 300 billion yen ($2.54 billion) in debt incurred by the truck and bus operations to the new firm, improving its financial condition. Mitsubishi overall has 1.3 trillion yen ($11 billion) in group interest-bearing debt.

The proposed spin-off will need shareholder approval, expected at a meeting before the end of the year.

Shares in Mitsubishi Motors are 1.88 percent lower at 261 yen near midday Thursday, on a day the broader market, measured by the Nikkei 225, is down 2.2 percent to 9017. That is close to the 19-year closing low the Nikkei touched earlier this week.

Mitsubishi sold trucks and buses worth 680 billion yen ($5.76 billion) in the year ended March 2002, about 20 percent of the automaker's group sales.

The new truck and bus arm will be held 40 percent each by Mitsubishi Motors and DaimlerChrysler, with the remainder held by Mitsubishi Heavy Industries Ltd, Mitsubishi Corp and Bank of Tokyo-Mitsubishi, according to the Nikkei.