On Monday, Mitsubishi Motors stock climbed. The media reports that the Japanese automaker is in conversation to join Nissan and Honda’s proposed strategic alliance.
In March, Nissan and Honda said they were considering working together on artificial intelligence for automotive software platforms and electric car components. They do not have any finance tie-up plans.
The three automakers’ representatives declined to comment. The stock of Mitsubishi Motors rose 6.3% in early afternoon trade. Nissan saw a 2.8% boost in stock, while Honda reported a 2.6% increase.
The proposed alliance highlights the two camps that the Japanese auto industry is splitting into and the mounting pressure on manufacturers to cooperate. This is to reduce the enormous expenses associated with creating new technology.
Toyota Motor partners with its allies, Suzuki, Subaru, and Mazda, in the opposing camp.
As a longstanding partner of Nissan and Renault, Mitsubishi Motors is owned 34% by Nissan.
Analysts stated in a client note that given Nissan’s ownership position in the business, it would make sense to take part in the upcoming alliance with Honda, and Goldman Sachs.
“We think software is the most significant aspect of this reported tie-up,” they said, noting that achieving economies of scale might be advantageous for all three businesses.
Last year, Nissan, Renault, and Mitsubishi Motors decided to reorganize their alliance with the goal of creating a smaller, more practical, and more flexible collaboration.
An investment of up to 600 million euros ($651 million) by Nissan and 200 million euros by Mitsubishi Motors in Renault’s electric vehicle company Ampere was included in this.
- Published By Team Genuine Reporter