According to the Nikkei newspaper on Sunday, Japan’s Mitsubishi Motors is going to become a part of an alliance between Nissan Motor and Honda Motor, forming a partnership between manufacturers with a combined sales volume of over 8 million cars.

According to Nikkei, Mitsubishi Motors—which Nissan owns 34% of—will collaborate with Honda and Nissan to settle the specifics of their strategic alliance. The three companies also want to standardise the in-car software that operates automobiles.

A spokesman for Nissan would only state that the claim was not based on anything either company has disclosed, while Mitsubishi Motors declined to comment on it. A request for comment from Honda spokespeople was not answered.

The drive coincides with Nissan, the third-largest carmaker in Japan, gradually losing market share in its two main markets, China and the US, which together accounted for half of its worldwide sales in the year ending in March.

Following severe discounting in the United States that nearly wiped out its first-quarter earnings, the business cut its year projection.

In March, Nissan and Honda announced that they were thinking about forming a strategic alliance to work together on the development of artificial intelligence software for automotive software platforms and components for electric vehicles.

With Nissan and Renault of France, Mitsubishi Motors is already a member of a long-standing alliance that the three manufacturers decided to reorganise last year with the goal of creating a smaller but more practical and flexible collaboration.

In order to combat the fierce rivalry in electric vehicles (EVs), which is dominated by businesses like China’s BYD and Tesla, Japan’s manufacturers might benefit from separate cooperation between Nissan, Honda, and Mitsubishi Motors.

Japanese auto companies used to be powerful in China, the largest auto market in the world, but today they face competition from local manufacturers who have quickly boosted output and won over customers with inexpensive cars that were packed with software.

(Adapted from Asia.Nikkei.com)

Categories: Economy & Finance, Strategy, Uncategorized