It’s official: Nissan, Honda and Mitsubishi to work together

Nissan, Honda and Mitsubishi have signed a memorandum of understanding to explore the possibility of Mitsubishi Motors’ participation, involvement and synergy sharing. 

This relationship will be integrated through the establishment of a joint holding company outlined in an MOU signed between Nissan and Honda.

The three Japanese brands have reached a basic agreement to proceed with discussions based on the framework established in the MOU signed by Nissan and Honda on August 1 regarding the commencement of a strategic partnership focused on intelligence and electrification.

Mitsubishi Motors forms part of a Renault-Nissan-Mitsubishi alliance formed in 2016 to include Mitsubishi. It is the world’s second-largest carmaker, selling more than one in nine new cars worldwide. It aims to conclude participation or involvement in business integration between Nissan and Honda by the end of January.

Nissan CEO Makoto Uchida said: “Honda and Nissan have begun considering a business integration, and will study the creation of significant synergies between the two companies in a wide range of fields.

“It is significant that Nissan’s partner, Mitsubishi Motors, is also involved in these discussions. We anticipate that if this integration comes to fruition, we will be able to deliver even greater value to a wider customer base.”

In a grim message, Nissan recently said it expected to cut 9,000 employees, 20% of global production capacity and $2.6bn (nearly R48bn) in costs.

Adding to the strain are weak sales and profitability in the US and China, while Donald Trump’s election adds to the uncertainty as is has promised to impose 25% across-the-board tariffs on Mexico, a vital, low-cost production hub for Nissan.

Mitsubishi Motors CEO Takao Kato said: “In an era of change in the automotive industry, the study between Nissan and Honda about a business integration will accelerate synergy maximisation effects, bringing high value also to the collaborative businesses with Mitsubishi Motors.”

Kato’s company took a one-time hit of 10.5bn yen (about R1.1bn) back in April 2023 due to slowing sales in China, where it’s a minor player. It too is affected by China’s electric car drive. Sales targets were also missed despite the merger with Chinese brand GAC.

Honda CEO Toshihiro Mibe said: “At this time of change in the automobile industry, which is said to occur once every 100 years, we hope that Mitsubishi Motors' participation in the business integration discussions of Nissan and Honda will lead to further social change, and that we will be able to become a leading company in creating new value in mobility.

Honda is reportedly facing job cuts doldrums as well in China. That country’s rapid shift to new energy vehicles (NEVs) frustrates internal combustion engine cars, with 2025 first-quarter sales dropping to 209,000 units.

While sales and operating profits are expected to decline, Fitch’s October 2024 currency issuer default ratings (IDRs) affirmed the company’s financial health outlook as stable thanks to a strong business profile, underpinned by its motorcycle business subsidiary.