Japan’s 3 Major Automakers to Form an Alliance

The automobile industry faces fierce competition, particularly as Chinese manufacturers lead the electric vehicle (EV) market. In response, major Japanese automakers are looking into strategic agreements to boost their competitiveness and innovation. Mitsubishi Motors is apparently in talks to join the existing Honda-Nissan cooperation.

This proposed collaboration seeks to combine resources and expertise with a focus on EV technologies and automotive software platforms. The collaboration began between Honda and Nissan in March 2024 and aims to expedite electrification and reduce costs by combining R&D resources and standardizing software architecture across their brands. This unifying approach is critical for competing with global giants like Tesla and rapidly growing Chinese firms like BYD and Geely.

Mitsubishi, which is already a member of the Renault-Nissan-Mitsubishi Alliance, has signed a nondisclosure agreement to help expedite conversations with Honda and Nissan. Given Nissan’s current 34% interest in Mitsubishi, this move makes sense. By collaborating, these firms hope to boost their positions in plug-in hybrid vehicles (PHEVs) and Japan’s kei (small) car category, where Mitsubishi has a significant presence.

The alliance between Honda, Nissan, and Mitsubishi would consolidate significant market share, with a combined sales volume of around 8.35 million vehicles per year. This figure compares with the approximately 16 million units sold by a large Japanese automobile conglomerate led by Toyota, which includes Subaru, Mazda, Suzuki, Daihatsu, and Hino Motors.

While the specifics of the partnership’s conditions are still unknown, industry analysts believe software development will play an important role in the collaboration. The partners are expected to build on each other’s strengths, such as Mitsubishi’s PHEV technology and Honda and Nissan’s experience with EVs and software, to improve their market offerings.