TOKYO (Reuters) – Japan’s Mitsubishi Motors is set to join an alliance between Honda and Nissan Motor Co, creating an auto group with combined sales of more than 8 million vehicles, the Nikkei newspaper reported on Sunday.
Mitsubishi Motors, which is 34% owned by Nissan, is finalizing the details of the partnership with Honda and Nissan, with the three companies aiming to standardize the in-vehicle software that controls cars, Nikkei reported.
Mitsubishi Motors declined to comment on the reports, while officials at Nissan and Honda were not immediately available for comment.
The move comes as Nissan, Japan’s third-largest automaker, has steadily lost market share in its two biggest markets, the United States and China, which account for half of its global sales in the 12 months to March.
The company on Thursday sharply cut its full-year outlook after heavy discounting in the United States almost completely wiped out its first-quarter profit.
The cooperation could help Japanese automakers cut costs and better position them to face stiff competition in the electric vehicle sector, dominated by Chinese companies such as BYD and Tesla.
Japanese brands once held sway in China, the world’s largest auto market, but now they are competing with domestic automakers that are rapidly ramping up production and winning over customers with cheaper, software-enabled cars.
Nissan and Honda said in March they were exploring a strategic partnership to produce electric vehicle parts, to further solidify their foothold in the global market for battery-powered vehicles, which is expected to grow over the next few years.
(Reporting by Kiyoshi Takenaka; Editing by Sonali Paul)
