The new company, Mitsubishi Fuso Truck and Bus Corp., will be 43% owned by DaimlerChrysler AG of Germany, which owns 37.3% of Mitsubishi Motors. The $745 million purchase by DaimlerChrysler will take place in March.
Eckrodt said, "We will now focus our management resources solely on our passenger car turnaround. Our improved financial situation also gives us a solid base to drive future growth."
The spin-off also puts the new truck and bus company in a strong position, according to Eckrodt. "Direct investment from DaimlerChrysler in Mitsubishi Fuso will enhance ties allowing further economies of scale," Eckrodt said. The change will allow Mitsubishi Fuso to take advantage of DaimlerChrysler's technology and cut costs by expanding global purchasing and working together on research.
Wilfried Porth from DaimlerChrysler is the new president and chief executive at Mitsubishi Fuso, while Takashi Usami, former Mitsubishi Motors vice president, became chairman.
The remainder of the board will be made up of two directors from DaimlerChrysler and three from Mitsubishi Motors.
Making its truck business independent will allow Mitsubishi Motors to focus on its passenger cars, whose sales have declined in Japan.
Mitsubishi Motors can also reduce debt through the spin-off, it said. Mitsubishi truck operations are strong, controlling the top market share in Japan.
Mitsubishi Motors has been making a gradual comeback under an alliance with DaimlerChrysler. It returned to profitability for the first time in three years the previous fiscal year.