Peugeot to help Mitsubishi on road to recovery
The Japanese car maker's stock improved to reach a six month high after news broke indicating that discussions had taken place with the European auto manufacturer. The talks come in the same month as Mitsubishi's pre-arranged announcement of a recovery plan leading to speculation that a tie-up with Peugeot could be central to that strategy. However, despite confirming to Reuters that it was in contact with the Japanese car company, Peugeot has distanced itself from the possibility of any firm agreements. 2004 proved to be a continuation of Mitsubishi's recent miserable form. Sales almost halved and the company lost its considerable financial backing from DaimlerChrysler. The company has struggled ever since it came to light in 2000 that senior management had hidden car faults and covered up recall problems. Mitsubishi now needs to find fresh financial support to avoid bankruptcy, with the possibility of an alliance with another car company the most favorable option. Currently, due to the poor sales, Mitsubishi has spare capacity at its production facilities, making a deal to build cars for other manufacturers under other branding an ideal outcome.