HONG KONG (Reuters Breakingviews) - Concise insights on global finance in the Covid-19 era.
PUSHED AROUND. Mitsubishi Motors may reverse its July decision to withdraw from Europe. Sources told The Financial Times that struggling alliance partners Renault and Nissan Motor leaned heavily on the group’s smallest member to let Renault build Mitsubishi models at its French factories – right after Nissan had refused to contemplate a similar idea from its Gallic partner and largest shareholder.
The move will preserve jobs at the French automaker’s underutilised, unionised production lines, but there is no commercial justification. Strategically, the alliance has been increasing regional specialisation. It made sense for Mitsubishi to leave Europe, where it has been losing money since 2018, so it can focus on Southeast Asia, where it generated 326 billion yen ($3 billion) in revenue in the first three quarters of its fiscal year – roughly twice its European sales. Once again, the dysfunctional alliance is being manipulated by French politics. Strong-arming the little guy is expedient, but in the long run ill-advised. (By Pete Sweeney)
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.