Shares of Mitsubishi Motors (7211.T) showed an upward swing on Monday following media reports that the Japanese automaker is in talks with Nissan (7201.T) and Honda (7267.T) for planned strategic partnership.
Nissan and Honda said in March they were looking at collaborating on electric vehicle components and artificial intelligence in automotive software platforms, though they are not planning a capital tie-up.
However the representatives for the three automakers declined to comment. Shares in Mitsubishi Motors climbed 6.3% in early afternoon trade. Nissan’s stock rose 2.8% and Honda’s gained 2.6%.
The planned partnership shows the increasing pressure on automakers to associate together to cut down on the massive costs involved in developing new technology as well as the two camps that the Japanese auto industry is dividing itself into.
The other camp comprises of Toyota Motor (7203.T),which works with its partners: Suzuki (7269.T), Subaru (7270.T) and Mazda (7261.T).
It is interesting to note here that 34% stakes of Mitsubishi Motors is owned by Nissan and its part of a long-standing alliance with Nissan and Renault.
Analysts at Goldman Sachs said that its participation in the planned partnership with Honda would be a natural progression given Nissan’s stake in the company.
There was a restructure of alliance between Nissan, Renault and Mitsubishi Motors which took place last year aiming to downsized and become more pragmatic and active partnership.
Nissan and Mitsubishi Motors will invest as much as 600 million euros ($651 million) and 200 million euros respectively in Renault’s electric vehicle business Ampere as aprt of this partnership.
