DaimlerChrysler gets control of Mitsubishi

DaimlerChrysler AG will get small cars and an increased presence in Asia in one package, thanks to a deal with Mitsubishi Motors Corp. The German-U.S. automaker agrees to acquire a 34% equity stake in Mitsubishi for US$2.1 billion. The alliance covers development and production of passenger cars and light commercial vehicles but does not include Mitsubishi's heavy truck division. The deal makes DaimlerChrysler the world's third-largest automotive group, producing 6.5 million vehicles annually. Crucial to DaimlerChrysler is access to Asia, a market it had been unable to enter. Mitsubishi is the market leader in the ASEAN countries, with a 26% market share. Combined, the two automakers will have a 10.8% market share in Japan and a 9.4% share in the rest of Asia. The automakers want to jointly develop a small car, and DaimlerChrysler hopes to expand its Smart brand through the alliance. For Mitsubishi, the deal means a new lease on life and a chance to deal with an overwhelming debt load of US$16.45 billion.