Japanese automobile giant Mitsubishi Motors (JP:7211) is reportedly in talks to join an alliance between Honda Motor Co. (JP:7267) and Nissan Motor Co. (JP:7201). According to Nikkei, these automakers will collaborate on a strategic partnership to standardize the in-vehicle software that controls cars. Nissan owns around 34% stake in Mitsubishi Motors. None of the companies have issued an official statement.
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Mitsubishi stock was up almost 6% as of writing, while Honda and Nissan shares gained over 2%.
Japanese Automakers Unite to Tackle Competition
Over the last few years, Japanese automakers have been facing stiff competition in the EV market, currently dominated by China-based BYD Co. (HK:1211) and the American EV giant Tesla (TSLA). Japanese companies previously enjoyed a strong presence in key automobile markets like China. However, they are struggling to keep up with the influx of affordable, software-loaded EVs.
Earlier in March, it was reported that rivals Honda and Nissan are considering a partnership to strengthen their presence in the EV (electric vehicle) market. Further reports surfaced in July about these companies exploring options to develop EV components jointly.
Additionally, Mitsubishi Motors is already involved in a long-standing alliance with Nissan and France-based Renault (FR:RNO). Last year, the three automakers agreed to restructure this partnership, aiming to create a more streamlined collaboration.
These partnerships could help Japanese automakers to cut costs and enhance their competitive position in the EV space.
Is Mitsubishi a Good Stock to Buy?
According to TipRanks, 7211 stock has received a Moderate Buy rating based on one Buy and one Hold recommendation. The Mitsubishi share price forecast is ¥485.80, which is 15.67% higher than the current price level.
