Mitsubishi Motors Corp. had the highest increase in over four years in Tokyo trading after the Nikkei newspaper said that Nissan Motor Co. will be selling jointly built minicars and purchasing fewer of them from Suzuki Motor Corp. Mitsubishi Motors increased by 21% to 125 yen, the largest gain since October 2008.
The benchmark Nikkei 225 Average increased by 0.6%. The Nikkei said that Nissan will begin sales in June of its own minicars that will be jointly developed with Mitsubishi Motors. Nikkei didn’t cite a source for its information. Japan Automotive Dealers Association said that minicars (vehicles with engine capacity of 0.66 liters or less) made up about 37% of auto sales in Japan in 2012.
Nikkei also said that Suzuki assembled over 70% of the minicars that Nissan sold last year. Satoru Takada, a Tokyo-based auto analyst at Toward the Infinite World Inc., said that investors will take this news positively since it indicates that their profit will increase in Japan, where there’s a big market for minicars. Suzuki reported a 1.6% decline as of 2:30 p.m., the only carmaker to drop today.
In 2011, Nissan and Mitsubishi set up a 50-50 joint venture to develop minicars for the Japanese market. Furthermore, Takada said that Mitsubishi benefited from a weakening yen. The yen has depreciated for a record 12 straight weeks compared to the dollar and eight weeks against the euro. Takada said that the stock seems “very cheap” when compared to that of Mazda and Fuji Heavy, which is why bargain hunters are drawn to it.