Mitsubishi is to become a part of the global Alliance with Nissan and Renault following Nissan’s move to acquire a 34% equity stake in Mitsubishi Motors (MMC).

With the addition of MMC, the Alliance will be in the world’s top three automotive groups by global volumes, with sales of 10 million units in the fiscal year 2016.

Nissan Chairman and Chief Executive Officer Carlos Ghosn announced that Nissan and MMC would collaborate on ‘joint purchasing, deeper localisation, joint plant utilisation, common vehicle platforms, technology-sharing and an expansion of the companies’ combined presence in both developed and emerging markets’.

“The combination of Nissan, Mitsubishi Motors and Renault will create a new force in global car-making,” said Ghosn. “It will be one of the world’s three largest automotive groups, with the economies of scale, breakthrough technologies and manufacturing capabilities to produce vehicles to serve customer demand in every market segment and in every geographic market around the world.”

Ghosn predicted that through its partnership with MMC, Nissan would target synergy benefits worth 24 billion yen in fiscal year 2017, rising to 60 billion yen in fiscal year 2018 and beyond. The gains will contribute to increased earnings per share worth an estimated 4 yen per share in fiscal year 2017 and 10 yen per share in fiscal year 2018 – on top of any earnings accretion linked to Nissan’s overall shareholding in Mitsubishi Motors.

Nissan offered its assistance at the request of Osamu Masuko, president and chief executive officer of MMC, following the company’s fuel economy crisis. The two companies have cooperated on kei-cars for the Japanese market over the past five years.

“We are committed to assisting Mitsubishi Motors as it rebuilds customer trust,” said Ghosn. “This is a priority as we pursue the synergies and growth potential of our enlarged relationship.”

Ghosn has announced a number of other management changes, effective November 1, to allow him to continue to focus on maintaining Nissan’s momentum in delivering performance, while at the same time supporting Masuko at MMC.

Ghosn concluded: “At a time of unprecedented change in the global auto industry, this strategy will build on our existing strengths and management capabilities to ensure increased competitiveness, better products for our customers and attractive returns for shareholders.”