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Mitsubishi Motors will join the Honda-Nissan alliance, Nikkei has learned.

The tie-up, whose members sell more than 8 million vehicles worldwide, will consolidate the domestic market into two forces: the Toyota Motor group and the Honda-Nissan-Mitsubishi alliance.

Tesla and Chinese automakers are investing heavily in electric vehicles, and Japanese automakers can't compete in terms of scale and supply chain.

The major shift in the auto industry will drive a major reorganization, including other sectors in Japan.

Honda Motor and Nissan Motor announced a comprehensive cooperation agreement in March, but no decision had been made on what to do with Mitsubishi Motors, in which Nissan holds a 34.01% stake.

Mitsubishi will join the framework of the Honda-Nissan alliance, and the three companies will work together to enhance their competitiveness in order to survive in the highly competitive market.

Mitsubishi Motors signed a nondisclosure agreement with Honda and Nissan and began discussions.

Honda and Nissan are the second- and third-largest automakers in Japan, respectively, with global sales of 4.1 million and 3.44 million units in the fiscal year ending March 2024.

When Mitsubishi's 810,000 units are added, the group will have sales of 8.35 million vehicles.

Toyota, the largest automaker, has been making alliances in Japan. It has formed a tie-up with Daihatsu, Suzuki, Subaru, Mazda and Hino Motors, bringing the five automakers' combined sales volume to 16 million units.

Mitsubishi will work with Honda and Nissan to finalize specific details of the alliance.

The three companies intend to standardize the in-vehicle software that controls the vehicle.

Nissan and Honda are expected to jointly develop the basic software, and will discuss its use in Mitsubishi vehicles.

Behind the alliance between Honda, Nissan and Mitsubishi is a sense of crisis over a major shift in the auto industry, which is said to occur only once every 100 years.

As the shift from gas-powered vehicles to EVs continues amid decarbonization, Japanese automakers are lagging behind due to the rise of emerging powers.

In 2023, Nissan and Honda sold only 140,000 and 19,000 EVs worldwide, respectively, while Tesla and BYD were far ahead with 1.8 million and 1.57 million units, respectively.

Ref: Mitsubishi Motors to join Honda-Nissan alliance (asia.nikkei)