Mitsubishi Motors joins the Honda-Nissan alliance, Nikkei reports

TOKYO (Reuters) – Japan’s Mitsubishi Motors is set to join an alliance between Honda Motor and Nissan Motor, creating an auto group with combined sales of more than 8 million vehicles, the Nikkei business magazine said on Sunday.

Mitsubishi Motors, which is 34% owned by Nissan, will work with Honda and Nissan to finalize details of their partnership, but the three companies plan to standardize the in-vehicle software that controls cars, Nikkei said.

Mitsubishi Motors declined to comment on the report, while officials at Nissan and Honda were not immediately available for comment.

The boost comes as Nissan, Japan’s third-largest carmaker, is steadily losing market share in its two biggest markets, the United States and China, which together accounted for half of global sales in the year to March.

On Thursday, the company lowered its full-year outlook after heavy discounts in the US almost completely wiped out first-quarter profits.

Cooperation could help Japan’s automakers cut costs and strengthen themselves against stiff competition in the electric vehicle space, dominated by companies such as China’s BYD and Tesla.

In China, the world’s largest auto market, Japanese brands used to be strong but are now competing against domestic automakers that have quickly ramped up production and won over consumers with low-priced, software-packed cars.

Nissan and Honda said in March they are considering a strategic partnership to produce EV components as they look to gain a bigger foothold in the global market for battery-powered cars, which is expected to grow in coming years.

(Reporting by Kiyoshi Takenaka; Editing by Sonali Paul)