Crisis for Japanese Automakers: "Mitsubishi, Nissan, and Honda Consider Joint Production in the U.S."

Kato, President of Mitsubishi Motors
"Hoping for Concrete Progress by Next Spring"
Expecting the Benefits of Economies of Scale

On October 31 (local time), the Mitsubishi Motors 'Delica' model was exhibited at the Tokyo Motor Show in Japan. Photo by AFP Yonhap News

Mitsubishi Motors, a major Japanese automaker, is reportedly considering a plan to jointly produce vehicles in the United States with Nissan, its largest shareholder, and Honda.

On December 3, Takao Kato, President of Mitsubishi Motors, stated in an interview with the Nihon Keizai Shimbun (Nikkei) that the company is "steadily proceeding with discussions on collaboration with Nissan and Honda, including the possibility of joint local production in the United States." He added, "We hope to achieve concrete progress by the time we announce our new mid-term management plan next spring."

This move is seen as being driven by internal assessments that restructuring production in the United States is urgent, due to both the ongoing U.S.-China conflict and the high-tariff policies of the Donald Trump administration. Previously, during Trump’s second administration, the U.S. imposed a 27.5% tariff (including the existing 2.5% tariff) on Japanese car imports in April, citing Section 232 of the Trade Expansion Act and claiming that imported cars posed a national security threat. Although the tariff on Japanese car imports was reduced to 15% in September, it remains at a high level.

Mitsubishi Motors does not have a production base in the United States and exports all models sold locally from Japan. For the period from April to September this year, its North American business turned to a loss. Its U.S. sales volume for fiscal year 2024 is expected to be only 113,000 units, which is just 10% of Nissan and Honda’s sales. President Kato emphasized the need for joint production, stating, "It is absolutely impossible to operate a plant independently with this sales scale."

This is also expected to be a 'win-win' strategy for Nissan and Honda, who are struggling with declining plant utilization rates in the U.S. Nissan operates two plants and Honda operates five, but both have seen lower utilization rates recently due to sluggish new car sales, leading to concerns about profitability.

The combined market share of the three companies in the U.S. new car market for 2024 is over 15%, surpassing Toyota, Japan’s largest automaker. Observers predict that joint production by the three companies could enhance cost competitiveness through economies of scale.

President Kato also expects the three companies to create synergy through joint vehicle development in North America and collaboration in overseas markets. Currently, in the Philippines, Honda sources minivans from Nissan, while in Oceania, including Australia, Mitsubishi Motors supplies pickup trucks to Nissan.

The Nikkei reported, "Mitsubishi Motors has continuously explored the possibility of three-way collaboration," and explained, "With the collapse of management integration talks between Nissan and Honda in February this year, the three-company joint strategy is once again coming to the fore."

This content was produced with the assistance of AI translation services.