Honda, Nissan and Mitsubishi Motors sign MoU on collaboration

Japanese car makers Honda Motor Co, Nissan Motor Co and Mitsubishi Motors Corporation on Monday signed a memorandum of understanding (MoU) to explore the possibility of Mitsubishi Motors joining a joint holding company proposed in an earlier MoU signed between Honda and Nissan.

The Honda-Nissan framework MOU, signed on 1 August proposed a strategic partnership on the next level development of intelligent electric vehicles.

The MoU focused on participation, involvement, and synergy sharing in relation to the business integration through the establishment of a joint holding company.

A Honda-Nissan combine would create a $54 billion company with annual output of 7.4 million vehicles, making it the world's third-largest auto manufacturer after Toyota and Volkswagen.

On Monday Nissan, Honda, and Mitsubishi Motors announced that they have agreed to build on the framework of the MoU signed by Honda and Nissan. Although not a signatory to the MoU, Mitsubishi Motors has been participating in discussions within the framework agreement.

Honda and Nissan is also considering a business integration through the establishment of a joint holding company. 

With the new MoU also involving Mitsubishi Motors, the three companies will explore the possibility of achieving greater synergies also including Mitsubishi Motors.

Mitsubishi Motors expects to reach a final decision on business integration among the three by the end of January 2025.

Nissan, however, has an existing French connection, with Renault, and the Honda-Nissan-Mitsubishi collaboration would require the consent of Renault, which has a major stake in Nissan.

Honda director Toshihiro Mibe said the automobile industry is in a flux and that the integration of the three automobile companies would lead to further changes in the automobile sector, which would help create new value in mobility.

According to Mitsubishi Motors president and CEO Takao Kato, the efforts at business integration would itself lead to increased synergies among the three companies.

While Nissan and Honda have started discussions to clarify the possibility of business integration by the end of January 2025, Mitsubishi Motors will make its position clear by January.

In fact, as part of its business integration with Honda Morors, Nissan, in November, announced a $2.6 billion cost cutting plan that involved reduction of 9,000 jobs and 20 per cent of its global production capacity.