Japan's Mitsubishi Motors, a junior partner of Nissan Motor, is considering not joining a planned business merger between Nissan and Honda Motor, sources told Reuters on Friday. Mitsubishi Motors plans to remain listed while continuing its cooperative relationship with both companies,

In December 2024, reports emerged that two of Japan's automotive juggernauts are looking to form a merger akin to the automotive equivalent of a 'dream team.' On Dec. 23, the leaders of Japanese automakers Nissan (NSANY) and Honda (HMC) announced that they intend to merge under a holding company in an effort to stay competitive against its rivals in a world shifting towards electric vehicle adoption.

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.

The problem is there is no likely outcome that would leave both companies and their employees better off than they are today.

Honda executives recently shared insights into their rationale for the proposed merger with Nissan.During a media roundtable at CES 2025 in Las Vegas Honda stressed the urgency to address mounting competition from Chinese automakers,

Honda and Nissan's $58bn merger aims to compete with China's EV dominance, but risks include cultural clashes, overlapping markets, and uncertain innovation outcomes.

Honda and Nissan signed a memorandum of understanding (MoU) to begin discussions on a potential business integration.

The mooted Honda Nissan merger and the fallout from leadership change at Stellantis suggests the auto industry must brace for turmoil, where size is a survival necessity.

Shares in Mitsubishi plunged nearly nine percent Friday after a report said it might not join a planned merger between industry giants Honda and Nissan. Honda, and its struggling rival Nissan, agreed last month to launch talks on the tie-up, which is seen as an attempt to catch up with Chinese rivals and Tesla on electric vehicles.

While Honda does have the Prologue, that vehicle was part of a $5 billion joint venture with GM that only lasted through the development of two vehicles. The Prologue has been a surprise EV hit, selling over 33,000 in 2024 and outselling the larger gas-powered Honda Passport.

Honda proposed a merger with Nissan at the end of last year that was accepted soon after, and as with any proposed merger of two industry giants, there is bound to be some collateral damage. Honda has expressed interest in merging with Nissan and Mitsubishi,