Mitsubishi Motors was the crown jewel Honda sought in Nissan merger talks

Hyaenidae · February 21

HIROFUMI YAMANAKA and AKIHIRO OTA
February 16, 2025 01:38 JST

TOKYO -- As Honda Motor pursued merger talks with Nissan Motor, the automaker was also after a prize that had long remained elusive: Mitsubishi Motors.

Honda's hope was for Mitsubishi to join a holding company to be formed by Honda and Nissan, bringing the three automakers together. The plan eventually collapsed with Honda and Nissan abandoning talks on Thursday.

In an event indicative of Honda's aim, Honda CEO Toshihiro Mibe insisted that Mitsubishi Motors CEO Takao Kato attend a news conference announcing the start of Honda-Nissan merger talks, scheduled for Dec. 20. When Kato told Mibe that he had to be in Indonesia that day, Mibe changed the date to Dec. 23.

Mitsubishi has proprietary plug-in hybrid technology as well as a vehicle lineup suited for traveling in rough terrain that is popular in Southeast Asia. These strengths were appealing to Honda.

But forming a tie-up with Mitsubishi would not be possible without Nissan's cooperation since Nissan is Mitsubishi's top shareholder with a 27% stake.

Mibe had been signaling Honda's interest in a tie-up to Kato since 2023. But Kato kept his distance. He was fully aware that significant investments are necessary for automobile electrification and software development, and going it alone would not be an option. But agreeing to a tie-up with a major automaker could mean being taken over.

Aware of Mitsubishi's caution, Honda tried to get closer to Mitsubishi through merger talks with Nissan.

On Aug. 1, Honda and Nissan announced they would jointly develop vehicles and cooperate in other ways, with Mitsubishi also taking part in the strategic partnership. Kato saw merits in such collaboration.

After months of stalled talks on how the cooperation would take shape, Honda and Nissan finally agreed in December to begin merger talks. Hoping to create an auto group rivaling Toyota, Mibe also asked Kato to take part in the framework.

Alarmed that participating in the talks would mean being swallowed up by Honda and Nissan, Kato tried to secure an escape route. The announcement of the merger talks said Mitsubishi would consider "participation or involvement in the business integration." "Involvement" could be interpreted to mean cooperation.

But after news of merger talks broke, the public perception was that Mitsubishi would be part of the holding group along with Honda and Nissan. Kato had to frantically explain to business partners that a merger was not a given.

Kato was also feeling implicit pressure from the Mitsubishi group.

After learning of the merger plan, a top executive at a leading Mitsubishi group company reminded Kato that the automaker is a member of the storied business group.

An automaker that has ties with many business sectors should remain within the group and cannot be a fully owned subsidiary of the Honda-Nissan holdings company, the thinking went.

Mitsubishi Motors was formed when Mitsubishi Heavy spun off its automobile division in 1970. The group's influence is strong, with the Mitsubishi group outnumbering Nissan four to three in Mitsubishi Motors' 13-member board.

The use of the three-diamond Mitsubishi group logo is also an important factor. The logo has gained recognition in Southeast Asia. Joining the holding company meant giving up that logo, which could lead to a loss of customers.

Kato proposed options at board meetings, and eventually leaned toward receiving a more-than-20% investment from the holding company, roughly the same amount of investment by Nissan.

This plan never came to light as merger talks collapsed.

But Honda does not appear to have given up. At the news conference announcing the scrapping of the talks, Mibe said the automaker will continue three-way talks on cooperation, including with Mitsubishi.

- NikkeiAsia

john cooper · February 21

On 2/21/2025 at 2:32 PM, Hyaenidae said:

HIROFUMI YAMANAKA and AKIHIRO OTA
February 16, 2025 01:38 JST

TOKYO -- As Honda Motor pursued merger talks with Nissan Motor, the automaker was also after a prize that had long remained elusive: Mitsubishi Motors.

Honda's hope was for Mitsubishi to join a holding company to be formed by Honda and Nissan, bringing the three automakers together. The plan eventually collapsed with Honda and Nissan abandoning talks on Thursday.

In an event indicative of Honda's aim, Honda CEO Toshihiro Mibe insisted that Mitsubishi Motors CEO Takao Kato attend a news conference announcing the start of Honda-Nissan merger talks, scheduled for Dec. 20. When Kato told Mibe that he had to be in Indonesia that day, Mibe changed the date to Dec. 23.

Mitsubishi has proprietary plug-in hybrid technology as well as a vehicle lineup suited for traveling in rough terrain that is popular in Southeast Asia. These strengths were appealing to Honda.

But forming a tie-up with Mitsubishi would not be possible without Nissan's cooperation since Nissan is Mitsubishi's top shareholder with a 27% stake.

Mibe had been signaling Honda's interest in a tie-up to Kato since 2023. But Kato kept his distance. He was fully aware that significant investments are necessary for automobile electrification and software development, and going it alone would not be an option. But agreeing to a tie-up with a major automaker could mean being taken over.

Aware of Mitsubishi's caution, Honda tried to get closer to Mitsubishi through merger talks with Nissan.

On Aug. 1, Honda and Nissan announced they would jointly develop vehicles and cooperate in other ways, with Mitsubishi also taking part in the strategic partnership. Kato saw merits in such collaboration.

After months of stalled talks on how the cooperation would take shape, Honda and Nissan finally agreed in December to begin merger talks. Hoping to create an auto group rivaling Toyota, Mibe also asked Kato to take part in the framework.

Alarmed that participating in the talks would mean being swallowed up by Honda and Nissan, Kato tried to secure an escape route. The announcement of the merger talks said Mitsubishi would consider "participation or involvement in the business integration." "Involvement" could be interpreted to mean cooperation.

But after news of merger talks broke, the public perception was that Mitsubishi would be part of the holding group along with Honda and Nissan. Kato had to frantically explain to business partners that a merger was not a given.

Kato was also feeling implicit pressure from the Mitsubishi group.

After learning of the merger plan, a top executive at a leading Mitsubishi group company reminded Kato that the automaker is a member of the storied business group.

An automaker that has ties with many business sectors should remain within the group and cannot be a fully owned subsidiary of the Honda-Nissan holdings company, the thinking went.

Mitsubishi Motors was formed when Mitsubishi Heavy spun off its automobile division in 1970. The group's influence is strong, with the Mitsubishi group outnumbering Nissan four to three in Mitsubishi Motors' 13-member board.

The use of the three-diamond Mitsubishi group logo is also an important factor. The logo has gained recognition in Southeast Asia. Joining the holding company meant giving up that logo, which could lead to a loss of customers.

Kato proposed options at board meetings, and eventually leaned toward receiving a more-than-20% investment from the holding company, roughly the same amount of investment by Nissan.

This plan never came to light as merger talks collapsed.

But Honda does not appear to have given up. At the news conference announcing the scrapping of the talks, Mibe said the automaker will continue three-way talks on cooperation, including with Mitsubishi.

- NikkeiAsia

Expand

If things go well behind closed doors, we might have one of the most refined off-roaders ever.

I hope, Nissan under the bonnet, Honda Inside and Out and Mitzi for 4WD systems

Gummybr · February 22

On 2/21/2025 at 10:10 PM, john cooper said:

If things go well behind closed doors, we might have one of the most refined off-roaders ever.

I hope, Nissan under the bonnet, Honda Inside and Out and Mitzi for 4WD systems

Expand

Ah but I see they are going to offer the Grandis which will be a rebadged Renault in Australia. Meaning that Renault might keep the brand Mitsubishi. Maybe they didn't go the three way with Nissan and Honda because of their affiliation with Renault. I don't know.

We will have to wait and see.

I hear that Tesla 'maybe' interested in Nissan and the Nissan shares have shot up with the news.

iRage · February 23

On 2/21/2025 at 10:10 PM, john cooper said:

If things go well behind closed doors, we might have one of the most refined off-roaders ever.

I hope, Nissan under the bonnet, Honda Inside and Out and Mitzi for 4WD systems

Expand

Actually....Nissan does not have any decent modern power trains. The e-Power system is absolutely horrendous on heavy cars. Then the VR and VQs simply are not going to work in many markets, with some variants being somewhat of a dead dinosaur (let's not forget that is one issue with the GTR). I (and most over here) do think that this will be more about technology transfer than any new combined model development (kind of like Subaru and Toyota in the early days). Honda already has a portfolio that works for their strategy. It is just that they don't have the required scope of emerging tech, which Mitsubishi does have when it comes to PHEV and EV tech. Same with Mitsubishi, unless they strongly desire to return to the passenger car segment despite its emerging success in other areas. On top of needing financial stability, what they could use is Honda's distribution network.

A lot of the auto journalists were commenting about this article...

The article says Mitsubishi has offroad vehicles but fails to realize that so does Honda (WR-V to BRV to the CRV to the HRV/Vezel). In the US they even have crossovers larger than the CRV and even pickup trucks. Honda doesn't have proper off-road SUVs but they have never been interested in that segment. What Honda lags is emerging technology for these vehicles and future models. Now if they are to get the tech I am sure they would be happy to stick a Honda badge on a Pajero just like they did with the Bighorn. So again it is more about the technology than actual models.

The article is missing a crucial element. Honda has stated that it will be at the negotiating tables if and only if Uchida leaves. Now..if Nissan has a 27% stake in Mitsubishi and Mitsubishi is not open to a direct merger with Honda then the only way any of this happens is if and only if Uchida and his team leaves (which is a good thing anyway because Uchida was not supposed to be the head in the first place and he and his team are mostly admin guys...not car guys with any form of automobile experience). It is obvious that Nissan is divided internally. Partly because Uchida is over-estimating his capabilities, and he and his team seem to be more interested in self-preservation than saving Nissan.

A lot of us were dumbfounded by the whole Nissan merger in the first place because Nissan did not have anything that would have solved Honda's problems. So the Mitsubishi courting was sort of expected. In fact, when Mitsubishi was in trouble in 2016 there were rumors that it was hinted that Mitsubishi should leave the Renault-Nissan-Mitsubishi alliance and look at other partners closer to home.

All in all Nissan still remains the odd-party out and is sort of like the nerdy brother all the guys hang out with just so they get to know his hot sister.

A few of Mitsubishi's upcoming models globally are rebadged or re-shelled Renaults. Not sure if that is because of maintaining existing agreements or because Renault is holding on to whatever stake they have in Mitsubishi. If Renault has any stake in Mitsubishi that is going to be something Honda might have concerns over.