Mitsubishi buys most shares in Thai venture

Mitsubishi buys most shares in Thai venture

TOKYO (AFP): Mitsubishi Motors Corp. said yesterday it now held a majority stake in its Thai automobile affiliate after investing 21 billion yen (US$176 million) on buying most of the shares held by its local partner.

The company's share price rose sharply on the news, with industry analysts saying the move would support Mitsubishi's longer term outlook despite the economic crisis in Thailand and the recent collapse of its currency.

The Japanese car maker said the purchase of shares from the Li group of companies had raised its interest in MMC Sittipol Co. Ltd. from 48 percent to 71.5 percent, including an indirect stake held through a holding company.

Mitsubishi controls 49 percent of the holding company with the balance held by a consortium of Japanese companies including major shipping line Nippon Yusen KK (NYK) and Tokio Fire and Marine Insurance Co. Ltd.

The company denied a report that it planned to make the 10- year-old venture a production center for a compact car targeted at other Asian markets.

"At present, we have no plans as reported," a spokesman said.

The Nihon Keizai Shimbun said Thursday that Mitsubishi planned to invest another three billion yen in the company, with the aim of launching exports of the new model in 2002, on either on a fully-assembled or knock-down basis.

"Auto demand in Thailand is expected to be sluggish over the next two years but as a production base for exports, Thailand will maintain its international competitiveness," a Mitsubishi official was quoted as saying.

The report said Mitsubishi planned to boost exports from 38,000 units in the 12 months to March this year to 60,000 units in the current year. MMC Sittipol produced 87,000 units last year, mostly a pick-up truck model.