Mitsubishi will not join Honda-Nissan merger: Report
What's the story
Japanese automaker Mitsubishi is looking to stay independent instead of joining the proposed mega-merger of Honda and Nissan, according to the Japanese newspaper Yomiuri. Last month, Honda and Nissan announced their potential merger through a memorandum of understanding (MoU) with the intention of forming a new holding company to compete in the global car market. The two companies aim to cut costs by sharing vehicle platforms and co-operating on new electric and hybrid cars.
Independence
Mitsubishi's stance on potential merger
Despite an initial MoU involving Mitsubishi in talks of "participation, involvement, and synergy sharing" in the Honda-Nissan merger, it now appears the company wants to go solo. The report indicates Mitsubishi had considered joining the new holding company with Honda and Nissan but has now opted out. This decision could potentially affect one of the biggest automotive mergers in history.
Market focus
Market strategy and share performance
After the news of its possible exit from the merger, Mitsubishi's shares plummeted by as much as 8.7% in early Tokyo trading on Friday. The company, which is partially owned by Nissan, intends to focus on growing its market in Southeast Asia according to Yomiuri. This strategic move could be one of the reasons why Mitsubishi is choosing to remain independent amid merger talks.
Official statement
Official response and future plans
In response to the report, Mitsubishi has neither confirmed nor denied its decision to opt out of the merger. The company said that it is still evaluating options. An official announcement regarding Mitsubishi's stance on the Honda-Nissan merger is expected next month. Despite its potential decision to remain independent, there's a possibility that the new Honda-Nissan entity could still hold a stake in Mitsubishi due to Nissan's existing ownership.