The Auto Writer

From a purely strategic point of view, the possible linking of French automaker Peugeot with Japanese car manufacturer Mitsubishi seems sensible. Both companies need a strategic partner in order to remain effective for years to come, while a hook up would also allow Peugeot to return to the ultra-competitive, yet profitable US market and expand into Asia.

Another Nissan Deal?

Although a Peugeot-Mitsubishi partnership seems comparable to the Renault-Nissan pairing in 1999, there are some distinct differences. Mitsubishi is much smaller than Nissan and doesn’t have the strong presence in the Asian market that would allow Peugeot to expand rapidly in China, India, and elsewhere.

Moreover, though Peugeot is the larger of the two French car manufacturers, the Nissan acquisition was a bonanza for Renault. Under the dual leadership of Carlos Ghosn, Nissan was rescued from the abyss and is a strong third among the eight Japanese automakers.

Conversely, Mitsubishi is ranked seventh in Japan and sells fewer than 900,000 cars annually including just 49,631 vehicles sold in the US this year through November. (Reuters: Mitsubishi deal won’t solve all Peugeot’s problems)

Peugeot has sold just over 1.6 million year to date, vehicles marketed as Peugeots and Citroens. Peugeot, like Renault, exited the US market years ago; having access to Mitsubishi’s US showrooms could bring its two brands back to North America quickly.

Mitsubishi 2011 Import

Peugeot is very interested in Mitsubishi electric car technology which includes the i-MiEV, a pure electric plug-in minicar that went on sale this past July. That car will be sold by Peugeot across Europe while Mitsubishi plans to introduce it to the US in 2011, but thankfully a different name is likely to be used.

So, how will the Peugeot-Mitsubishi deal be crafted? One way would be for the Peugeot family to sell off part of its ownership in the French automaker, reducing its stake from 30 to 22 percent in a bid to raise two billion dollars, monies which would allow it to gain a 50 percent stake in Mitsubishi.  (The New York Times: Peugeot and Mitsubishi Discuss Deeper Ties)

We should hear more new about the potential partnership over the next few days.