Mitsubishi Motors Has Begun Considering Not Joining Merger Talks with Honda, Nissan; Automaker will Strengthen Cooperation with Both Companies

The Yomiuri Shimbun

14:44 JST, January 24, 2025

Mitsubishi Motors Corp. has begun considering not joining merger talks between Honda Motor Co. and Nissan Motor Co., The Yomiuri Shimbun has learned. The company is now making arrangements based on that decision.

Honda and Nissan are considering establishing a new holding company under which both would operate. Mitsubishi Motors had considered joining the merger talks but is now considering retaining its listing status while strengthening cooperation with the two companies, according to multiple sources.

The automaker will for the time being maintain its current structure, which allows its management to make flexible decisions, as the company aims to expand its share of the Southeast Asian market, where it has a strong presence.

When Honda and Nissan announced in December that they would enter into merger talks, Mitsubishi Motors said it would decide by the end of January whether to join. This month, Mitsubishi Motors President Takao Kato expressed that the company would carefully assess the progress of the Honda-Nissan merger talks, saying, “We are not necessarily moving toward a merger. It is one of the options.”

In 2016, led by then President Carlos Ghosn, Nissan acquired a 34% equity stake in Mitsubishi Motors, which was suffering from a management crisis following a fuel economy data manipulation scandal. Currently, Nissan holds 27% of Mitsubishi Motors’ shares, making the latter company an equity-method affiliate.

It was in this context that Mitsubishi Motors had been considering its participation in the merger talks. The automaker has brand power in Southeast Asia, so its main battleground is different from that of Honda and Nissan, which are focusing on the U.S. market. It was thought that joining the merger would likely complement Mitsubishi Motors’ current business strategy.

However, Mitsubishi Motors’ market capitalization was about ¥700 billion as of Thursday, much smaller than Honda’s ¥7.9 trillion and Nissan’s ¥1.6 trillion. There were concerns that if Mitsubishi Motors participated in the merger, it would face difficulties in getting its own perspectives reflected in the joint holding company’s managerial decisions.

Mitsubishi Motors’ shareholders are also thought to be behind the company’s consideration of not joining the merger talks. Shareholders such as Mitsubishi Corp., which owns about 20% of Mitsubishi Motors’ shares, is said to be of the belief that Mitsubishi Motors should first observe the effectiveness of restructuring measures being implemented by Nissan, which is in the process of rebuilding its business.

Mitsubishi Motors believes it is possible to mutually supply vehicles and conduct technical tie-ups without rushing into business integration. The automaker also thinks even large companies like Honda and Nissan will find it difficult to cover the huge development costs by itself in the fields of autonomous driving and next-generation vehicles such as software-defined vehicles, the capabilities of which can be enhanced by updating their software.

The total global sales volume of Honda and Nissan was 7.35 million units in 2023. The figure was the third largest among automaker groups even without including Mitsubishi Motors’ sales, which numbered 780,000 units.