DCX sells its stake in Mitsubishi

DAIMLERCHRYSLER has sold its remaining 12.4 per cent stake in the Mitsubishi Motors Corporation.

Investment bank Goldman Sachs has bought the shareholding and late last week was placing shares with investors around the globe.

Once the details are finalised, the transaction is expected to improve the German-American auto giant's financial income this year by around $803 million (500m euros).

In a statement, DaimlerChrysler said current co-operation projects between the two companies would not be affected, such as the joint development and production of engines - which includes a recently unveiled turbocharged three-cylinder engine slated for the 2007 Smart ForTwo micro car, the shared use of vehicle architecture and the joint production of passenger cars, 4WD wagons and pickup trucks.

In conjunction with the announcement, Dr Rudiger Grube, who oversees the company's co-operation with Mitsubishi, last week resigned from his MMC board position.

DCX had a controlling 37 per cent stake in Mitsubishi and prior to its partial pullout in April 2004 considered the Japanese company its key partner in conquering established and emerging markets throughout the world.

Last week, MMC posted an operating loss of 19.8 billion yen for the first-half fiscal year (April 1 to September 30), which was an improvement of 56.6 billion yen over the same period last year.

Consolidated net sales totalled 991.3 billion yen, down 79.5 billion yen from the same period last year, largely as a result of lower OEM supply volumes in overseas markets.

This negative factor was offset by lower depreciation costs as a result of asset impairment charges taken in the US and Australia during the previous fiscal year, as well as lower sales promotions costs and lower warranty expenses.