UPDATE 3-Nissan, Mitsubishi Motors announce deeper ties

* Nissan, Mitsubishi to supply more cars to each other

* Nissan, Mitsubishi studying 50-50 jv for minicars in Japan

* Nissan, Mitsubishi plan no capital tie-up -CEOs

* Mitsubishi shares soar 8.5 pct, Nissan in line with market
(Updates throughout with details)

By Chang-Ran Kim, Asia autos correspondent

TOKYO, Dec 14 (BestGrowthStock) – Nissan Motor Co (7201.T: ) and
Mitsubishi Motors Corp (7211.T: ) said they would deepen their
operational ties to make better use of their resources as a
strong yen makes competing tougher for Japanese automakers.

Nissan and Mitsubishi, Japan’s No.3 and No.6 automakers in
2009, have been working together since 2003, mainly involving
Mitsubishi Motors’ building 660cc minivehicles under Nissan’s
badge in Japan.

Automakers around the world are actively seeking operational
partnerships to save costs by sharing vehicle platforms and
components. Nissan and its 43 percent owner, Renault (RENA.PA: ),
earlier this year joined hands with Daimler (DAIGn.DE: ) to share
vehicles and engines with the maker of Mercedes-Benz cars.

As yen strength persists and domestic sales contract,
Japanese automakers are losing money producing vehicles at home
and are looking for ways to trim costs, including shifting at
least some production to lower-cost markets overseas.

But they are also under political pressure to protect jobs at
home and keep factories in Japan open.

Under the new agreement, Nissan will provide a light van to
Mitsubishi Motors for the Japanese market, while Mitsubishi will
supply an SUV to Nissan for sale in the Middle East, they said.

Discussions are also underway for the production of Nissan’s
Navara pickup truck at Mitsubishi’s Thai factory, and for the
establishment of a 50-50 joint venture to develop and produce
660cc minivehicles for Japan.

Nissan said it was also considering providing Mitsubishi
Motors with higher-end models in Japan.

“This agreement is important for Nissan as it supports our
expansion in emerging markets, meets immediate needs overseas,
and enables us to grow our minicar business in Japan,” Nissan CEO
Carlos Ghosn told a joint news conference with his Mitsubishi
counterpart, Osamu Masuko.

“In the global auto industry, cooperation on specific
projects among automakers is becoming increasingly common. It is
a signal of how our industry is evolving to sustain success over
the long term,” Ghosn said.

Both presidents said they were not considering a capital
tie-up, but added they would continue to look for more
opportunities for cooperation.

Earlier this year, Toyota Motor Corp (7203.T: ) also said it
would enter the minivehicle segment, which is unique to Japan and
accounts for 35 percent of the shrinking market.

MITSUBISHI MOTORS SHARES SOAR

To reduce costs, Nissan has already started to import the
March subcompact sold in Japan from Thailand this year, while
Mitsubishi Motors plans to do the same with its “Global Small”
car to be built in the Southeast Asian nation from 2012.

News of the joint news conference pushed shares of Mitsubishi
Motors up 8.5 percent to 128 yen by the close of trade in what
one analyst attributed to buying by retail investors sensitive to
news flow on the low-priced stock.

“We’re seeing an influx of individual investors to the market
and as they’re more active, smaller stocks tend to get a bigger
boost,” said Mitsushige Akino, chief fund manager at Ichiyoshi
Investment Management.

Nissan ended up 0.3 percent, roughly in line with the
benchmark Nikkei (.N225: ) average.

Mitsubishi’s Masuko has promised to announce a new mid-term
business plan by the end of this month, to outline the company’s
growth strategy over the next few years.

Mitsubishi Motors is burdened with factories in the United
States and the Netherlands that are severely underused.
(Additional reporting by Tim Kelly and Antoni Slodkowski;
Editing by Joseph Radford)

UPDATE 3-Nissan, Mitsubishi Motors announce deeper ties