DaimlerChrysler is pulling the plug on its stake in Mitsubishi Motors to leave the German-US company's bid to become a global car maker in disarray and casting doubt over the Japanese firm's future.
DaimlerChrysler said it would not inject new funds into a proposed capital increase and rescue plan for Mitsubishi Motors after it failed to reach an acceptable deal with other shareholders in the Mitsubishi group.
Though DaimlerChrysler is ending financial support for Mitsubishi Motors and may reclassify its 37 per cent stake as available for sale, DaimlerChrysler Chief Financial Officer Manfred Gentz said the German firm had not yet decided to seek a buyer for its stake.
Mr Gentz said he saw no reason for an immediate write-off of the stake but could not specify the decision's impact on 2004 results. He said the US Chrysler unit would continue to cooperate with Mitsubishi on new vehicles and car production.
"As far as our Asian strategy is concerned, we have to reconsider what has to be changed and what cannot be," he added.
DaimlerChrysler shares shot higher as investors expressed relief at what appeared to be the end of its costly entanglement with the struggling Japanese carmaker.
"It looks like some members of the management or supervisory board eventually decided to stop throwing good money after bad," said Heino Ruland, auto analyst at Frankfurt brokerage firm Steubing.
The decision came at an extraordinary meeting of DaimlerChrysler's supervisory and management boards on Thursday, just two weeks after Chief Executive Juergen Schrempp defended his global strategy in front of angry shareholders.
Mr Schrempp, who has presided over the loss of some €37 billion in market capitalisation since Daimler merged with Chrysler in 1998, engineered the purchase of the Mitsubishi Motors stake in 2000.