For Mitsubishi, it is a lifeline for the company who is embroiled in its third scandal in two decades after falsifying fuel-economy ratings. It will also be able to tap onto Nissan’s strong presence in the US and its expertise in electrification. For Nissan, the deal would allow the automotive company to gain a leg up in Japan’s small car market and make inroads into Southeast Asia.

With the cooperation, Mitsubishi joins the existing alliance between Nissan and Renault, strengthening their hold in the automotive industry.

Nissan CEO Carlos Ghosn, who is also the CEO of Renault and the Nissan-Renault alliance, commented: “This is a breakthrough transaction and a win-win for both Nissan and Mitsubishi Motors. It creates a dynamic new force in the automotive industry that will cooperate intensively, and generate sizeable synergies.”

He also added that the two companies would be able to share and jointly develop technology by coordinating purchasing, plant utilisation and cooperating in growth markets.