Peugeot Citroen has announced it is in talks with Mitsubishi Motors about a “strategic partnership”. The two car makers already work together in Russia, on developing 4wd’s and electric cars.
A Mitsubishi spokesman said: “It’s true that we are discussing various possibilities, and a capital tie-up is among them.”
Mitsubishi shares finished 13% up on the news after earlier reaching 22%.
The Nikkei newspaper said the deal would mean Peugeot in effect taking over Mitsubishi through buying a 50% stake; however, Mitsubishi may also buy a stake in the French car maker.
The Japanese carmaker reported a loss of just over $400m in the first half of 2009 and it had previously said it was not looking for any “car alliances” and would “go it alone” with the backing of Mitsubishi Group.
Toshihiko Tabei from Kazaka Securities in Tokyo said: “It’s good news for Mitsubishi Motors. While Mitsubishi Motors still faces other challenges… a Peugeot deal would be positive for its electric vehicles business.”