The proposed merger between Honda and Nissan has been making waves in the automotive world, but not all of the deal’s potential stakeholders are on board. Mitsubishi Motors, a junior partner of Nissan, is reportedly considering stepping away from the deal.
Sources close to the matter told Reuters that Mitsubishi is skeptical about its ability to influence the partnership’s direction, given its smaller size compared to the other two automakers. If Mitsubishi chooses to remain independent, the decision could fuel uncertainty about the Honda-Nissan merger, which some analysts already view with skepticism.
Why Mitsubishi may opt-out
The merger between Honda and Nissan, projected to create the world’s third-largest automotive group with an annual output of 7.4 million vehicles, was announced with much fanfare. However, Mitsubishi seems unconvinced about its role in the alliance. The company’s primary concern appears to be the difficulty of influencing management decisions within a new joint-holding company dominated by its larger partners.
A report from Japan’s Yomiuri newspaper suggested that Mitsubishi plans to maintain its current structure while focusing on growth in the Southeast Asian market. This region has been a stronghold for the automaker, and doubling down on it may yield better results than becoming a minor player in the Honda-Nissan merger.
Brewing skepticism about a merger
The doubts surrounding Mitsubishi’s participation are emblematic of the broader uncertainty surrounding the Honda-Nissan partnership. Honda CEO Toshihiro Mibe recently struggled to articulate the strategic rationale for the merger, fueling speculation that the deal is more about saving Nissan from financial instability than creating an automotive giant of equals.
Analysts have questioned the viability of the merger, citing overlapping product portfolios and both companies’ struggles to compete in the growing electric vehicle (EV) market. Nissan’s once-innovative EV lineup has lost its edge, while Honda has lagged behind competitors in developing compelling EV offerings.
Government pressure and hidden motives
Speculation has also arisen that Japan’s government may be behind the push for the merger. By keeping Nissan under Japanese control, policymakers could be attempting to fend off foreign interest, particularly from Foxconn, a Taiwanese manufacturing giant that has reportedly eyed Nissan for acquisition.
Even with government support, the road ahead for Honda and Nissan is fraught with challenges. The merger is unlikely to yield immediate results, with analysts predicting a three- to five-year timeline before any significant benefits emerge.
Final thoughts
Mitsubishi’s decision to potentially stay out of the merger doesn’t necessarily mean severing ties. The automaker has stated it will continue its cooperative relationship with both Honda and Nissan. However, by charting its own course, Mitsubishi can focus on its strengths in Southeast Asia rather than risk being overshadowed in a partnership where its influence would be minimal.
As Honda and Nissan move forward, Mitsubishi’s stance may serve as a reminder of the skepticism clouding this merger. Whether the deal becomes a bold industry-defining move or a cautionary tale remains to be seen. For now, Mitsubishi seems content to stay in its lane, betting on its ability to achieve success on its own terms.
