Times are tough in the automotive industry with more automakers entering into alliances to pool resources and development money especially in the development of electric vehicles. The latest report suggests that a new alliance between Honda, Nissan, and Mitsubishi might be formed.
A new report suggests that Mitusbishi could potentially be the third member in an alliance with Honda and Nissan.
Alliances are rapidly becoming the new normal in the automotive industry with outside pressures and the high cost of EV development pushing more automakers into alliances in an attempt to reduce costs while still reaching their respective green goals due to the pooling of engineering and design talent when it comes to building some of these models.
A new report suggests that Honda, Nissan, and Mitsubishi are potentially entering a three-way alliance in what could potentially be a massive shakeup in the automotive landscape that might benefit all three companies as they attempt to achieve their green vehicle goals with enhanced cooperation and a larger pool of resources.
The addition of Mitsubishi would boost alliance
The addition of Mitsubishi would help boost an existing deal between Honda and Nissan.
According to the report which was published by Nikkei Asia Mitsubishi is attempting to enter the existing alliance that already exists between Nissan and Honda. The existing agreement between Honda and Nissan focused the bulk of their collaboration on “automotive software platforms, core components relating to EVs, and complementary products.” While the addition of Mitsubishi may seem a bit odd at first glance, it begins to make sense once you realize that Nissan owns 34 percent stake in Mitsubishi. This stake gives Nissan a good amount of leverage and the company can use it to help encourage Mitsu to join in on the fun.
The report also reveals that Mitsubishi has already begun the first steps of being admitted with the company signing NDA agreements with Honda and Nissan. This report helped to add more vigor to Mitsubishi’s stock price with the company’s stock rising by 6.3% when the news was first revealed. Honda and Nissan also saw their shares increase too with both firms seeing an increase of 2.6 and 2.8% respectively.
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Triple alliance will help cut costs
Cutting costs and enhancing devlopment of EVs would be key goals in the rumored triple alliance.
A core reason for the potential deal is the same basic goal that other alliances have, reducing costs. Having three companies pool together for vehicle development would help reduce costs while also speeding up the development of models which would in turn help them reach dealerships faster versus what could’ve been if vehicles were developed separately by each company. This alliance would also allow the three companies to better respond to changing market trends including the rise of Chinese competition in the EV segment.
This alliance would not be the first time that three Japanese automakers pooled together for a broader cause with Toyota, Subaru, and Mazda also entering a partnership to help produce a new generation of ICE engines. Each company will build its own unique flavor of engine but the end goal is the same with improved performance and efficiency being top goals.
As for this second alliance, we look forward to seeing if this alliance does indeed come into fruition since all three companies will stand to benefit from shared development and cost sharing especially as Chinese automakers are preparing to flex their muscles in the EV segment thanks to a wave of models that blend impressive amounts of range with a price point that’s low enough to reach out to a wider range of buyers depending on what market these vehicles are entering.
Could Mazda and Ford get back together?
Highly unlikely. Not much in common anymore.
Paul E.