Mitsubishi Partners Nissan & Honda To Take On Tesla & Chinese Brands

According to the Nikkei business daily, Mitsubishi Motors of Japan is set to form an automobile alliance with Honda Motor and Nissan Motor, with a combined yearly sales volume reaching 8 million vehicles.

Mitsubishi Motors, which is now 34% controlled by Nissan, will work with Honda and Nissan to finalise the details of their alliance. According to Nikkei, the group wants to standardise the in-car software that controls how the vehicle operates.

The Japanese manufacturers are making a calculated move with this cooperation. The two biggest markets for Nissan, the third-largest carmaker in Japan, are the US and China, which together accounted for half of its global sales in the fiscal year that ended in March. However, Nissan has been gradually losing market share in these two regions.

Nissan recently reduced its yearly projection after several price cuts of its products took place in the US market, which almost completely erased its first-quarter earnings.

The partnership might help the Japanese automakers cut expenses dramatically and improve their standing in the very competitive electric vehicle (EV) sector, which is now dominated by businesses like Tesla and BYD of China.

The once powerful Japanese companies now face fierce competition from local automakers in China, the world's largest car market, as they have increased output and drawn customers with low-cost, high-tech automobiles.

In an effort to gain a bigger piece of the expanding worldwide market for battery-powered vehicles, Nissan and Honda announced in March that they were considering forming a strategic alliance to manufacture EV components.

Source: REUTERS