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Turnaround Progress
MMC to Spin off AT and CVT Operations into New Company. Integrate Operations with JATCO TransTechnology

- MMC, JATCO TransTechnology and Nissan Motor Form Transmission Alliance -

Date: October 4, 2001

Mitsubishi Motors Corporation announced today that it will form a new transmission alliance relationship with JATCO TransTechnology(JTT) and Nissan Motor Co, forming the newly integrated company which will eventually be the world class producer of automatic transmissions.

The newly integrated company will be created by mid-2002 through the integration of MMC's existing production and R&D units of automatic transmission, with Nissan's JATCO TransTechnology (JTT). The newly integrated company will manufacture both automatic transmissions (AT) and continuously variable transmissions (CVT), and is expected to reach an annual level of four million units within a few years, making it the world class largest transmission producer.

Today's announcement is the latest action related to MMC's ongoing Turnaround Plan, which aims to strengthen the future of the company by optimizing cost, process and products to serve MMC customers best.

The transmission alliance is designed as a win-win relationship between MMC, JTT and Nissan Motor, with MMC taking a major step forward in achieving its Turnaround goals and JTT achieving its growth strategy.

The key advantages of this alliance are that the newly integrated company will supply MMC with top quality transmission components matching future market and technology requirements, and free MMC from the future financial and engineering investments that would be necessary for the further development of transmissions.

The combination of MMC's leading transmission technologies and experienced workforce with JTT will achieve important economies of scale and cutting edge technology in future investment and R&D, resulting in superior products for our customers at competitive costs.

The formation of this alliance also is part of a global automotive industry trend in which independent suppliers of AT and CVT are expected to become dominant market players in the years ahead.

To manage the transition, MMC has established Transmission Business Preparation Office, a temporary organization that will ensure the smooth and timely completion of the transition, as well as to establish appropriate working procedures for the future alliance. The details of personnel transfers and other relevant matters will be discussed with the company union in the due course.

To form the newly integrated company, at first, MMC will spin-off automatic transmission business into a new legal entity, and, subsequently, MMC and JTT will exchange shares, to create a corporate structure MMC holding share of JTT, with board and management representation.

Following today's signing of 3 party memorandum of understanding, Nissan Motor, JTT and MMC intend to finalize all transactions, following the execution of definitive agreements, by mid-2002 at the latest.

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