Mitsubishi Motors Shares Surge on Reports of Potential Partnership

Shares in Mitsubishi Motors increased significantly on Monday following media reports suggesting the Japanese automaker is in discussions to join Nissan and Honda’s planned strategic partnership.

Partnership Discussions:

Nissan and Honda announced in March that they were exploring a collaboration focused on electric vehicle components and artificial intelligence for automotive software platforms. However, they clarified that they are not considering a capital tie-up now.

Mitsubishi Motors’ stock jumped 6.3% in early afternoon trading. Similarly, Nissan’s shares rose by 2.8%, while Honda’s gained 2.6%. This positive market reaction highlights investor optimism about the potential collaboration.

Industry Context:

The planned partnership highlights the growing trend among automakers collaborating to share the substantial costs of developing new technologies.

The Japanese auto industry is increasingly divided into two main groups: one led by Nissan, Honda, and potentially Mitsubishi, and the other by Toyota Motor, which collaborates with Suzuki, Subaru, and Mazda.

Background and Analysis:

Mitsubishi Motors is 34% owned by Nissan and is part of a long-standing alliance with Nissan and Renault.

Analysts at Goldman Sachs noted that Mitsubishi’s involvement in the partnership with Honda would be a natural progression given Nissan’s stake in the company.

They emphasized the importance of software in this potential tie-up, suggesting that all three companies could benefit from economies of scale.

Previous Alliances and Investments:

Last year, Nissan, Renault, and Mitsubishi Motors agreed to restructure their alliance to create a more pragmatic and agile partnership.

As part of this restructuring, Nissan and Mitsubishi Motors committed to investing up to 600 million euros ($651 million) and 200 million euros, respectively, in Renault’s electric vehicle business, Ampere.