Nissan chief Ghosn to run scandal-hit Mitsubishi Motors

Carlos Ghosn is to be the new chairman of Mitsubishi Motors after Nissan became the scandal-hit brand's biggest shareholder.

The deal, which amounted to a rescue, was completed on Thursday.

Mitsubishi (LSE: 7035.L - news) is struggling to overcome the fallout from cheating - uncovered by Nissan - that saw customers duped on fuel efficiency levels for decades.

It has set aside more than £500m to compensate owners of vehicles sold in Japan since 1991 and those it made for Nissan.

Japan's second-largest carmaker stepped in to take a 34% stake in smaller rival Mitsubishi, paying £1.5bn, as the company grappled with regulators and rising costs related to the deliberate falsification of mileage tests .

The appointment of Mr Ghosn makes him the head of three major automakers, including France's Renault (LSE: 0NQF.L - news) which holds a major stake in Nissan.

He has been a prominent figure in the UK's Brexit debate, having warned Nissan could withhold investment at its Sunderland plant if the country leaves the single market unless the Government guarantees compensation.

He later held talks on the issue with Theresa May.

His new role was confirmed at a news conference in Tokyo.

Mitsubishi's current chairman and president, Osamu Masuko, is to stay on as president when the changes take effect in December.

Mr Ghosn told reporters: "Through this transaction, we're sending a clear message we believe in the underlying strength of Japanese carmaking."

Speculation over his appointment on Wednesday helped shares in Mitsubishi climb 8%. They gained a further 3% on Thursday.

The company issued a profit warning earlier this week saying it now expected to record a 240bn yen (£1.9bn) loss in its financial year to March 2017.