10-Year Pact Expires, Mitsubishi No Longer Hands Its Fate to Nissan

Written by | Du Yongfang

Editor | Huang Dalu

Design | Zhen Youmei

Cover Image | XY-AI

In 2016, under the leadership of then-chairman Carlos Ghosn, Nissan Motor acquired newly issued shares of Mitsubishi Motors for about 237.4 billion yen, securing a 34% stake to become the largest shareholder.

At that time, Mitsubishi had just admitted to fuel consumption data falsification, stock prices plummeted, and this cash infusion allowed it to breathe. Nissan intended to make both companies stronger by sharing technology, parts, and plants.

In October 2016, then Nissan Motor Chairman and President Carlos Ghosn (left) and then Mitsubishi Motors Chairman and President Osamu Masuko (right) after attending a press conference in Tokyo.

The transaction included a clause: for ten years from October 20, 2016, Nissan must obtain prior consent from Mitsubishi to transfer Mitsubishi shares. On October 20, 2026, this transfer restriction expired.

The initial savior itself fell into restructuring. In fiscal 2025, Nissan reported a net loss of about 533 billion yen, marking the second consecutive year of losses.

Although Mitsubishi maintained profitability, its financial situation is tight. For the same fiscal year, operating profit was about 75.5 billion yen, down 45.6% year-on-year; net profit was about 10 billion yen, down 75.6%.

More notably, sales: global sales dropped from 1.244 million units in fiscal 2018 to 797,000 units, a decrease of over one-third over seven years. Competition from Chinese brands in the Southeast Asian market, US tariffs, and the Middle East conflict are all adding pressure.

With both companies' situations deteriorating simultaneously, their capital relationship naturally needed re-evaluation.

Before the transfer restriction expired, Nissan stated it would maintain the existing capital relationship. According to a Kyodo News report on September 25, Nissan leans towards continuing to hold 26.67% of Mitsubishi's shares.

The reasons not to sell are realistic: shared lightweight car development is still needed for Nissan's reconstruction; factory restructuring is progressing as planned, with no pressure to cash out immediately; Mitsubishi's stock price is below the investment level, selling now might result in a loss.

The shareholding being 26.67% instead of 34% is related to a reduction in November 2024. At that time, Nissan's performance plunged, announcing layoffs of 9,000 people, while selling back about 149 million shares of Mitsubishi to Mitsubishi Motors, equivalent to 10.02% of Mitsubishi's then issued shares (excluding treasury shares). The selling price was 460.6 Yen per share, lower than the entry price of 468.52 Yen eight years ago.

Since Mitsubishi's buyback also changed the share base used to calculate shareholding, Nissan's shareholding dropped to 26.67%. In other words, before the transfer restriction expired, the capital tie between both parties had already loosened once.

Product relations are also changing. Mitsubishi is giving its own answer: The new-generation Outlander is preparing to switch to an independent platform, the Pajero is returning at a higher price, while establishing product cooperation with Honda and Honghua Advanced.

Nissan remains a major shareholder, but Mitsubishi is taking back more decision-making power in product development and re-selecting partners.

10-Year Alliance, Shared Benefits Come with Costs

The alliance has indeed left visible results. The Outlander shares a platform with the Nissan X-Trail; Nissan Sakura and Mitsubishi eK X, two lightweight pure electric vehicles, were co-developed by both sides.

The Mizushima Plant located in Okayama Prefecture used to produce the Lancer Evolution; now about 80% of output is lightweight vehicles, including models of Nissan brand. Nissan provides some core development capabilities, Mitsubishi undertakes manufacturing, so both sides share investments and utilize existing capacity.

But outside of lightweight vehicles, the cost advantages of shared development are not always realized.

A Mitsubishi executive believes some Nissan part specifications are higher than the demand of Mitsubishi's target markets, which actually weakens the cost advantage brought by sharing.

Mitsubishi's main markets are emerging economies like Southeast Asia. Specifications developed by Nissan according to North American and European demands, placed in price-sensitive Southeast Asia, may not make consumers pay more, but could drive up Mitsubishi's costs.

The premise for platform and part sharing is that product requirements between the two are close enough. Facing different customers and price ranges, after sharing they need to re-adapt and validate, and the development fees originally intended to be saved could be offset by these extra costs. The division of labor that works on lightweight vehicles is hard to replicate verbatim across the entire product line.

The next step for Outlander reflects Mitsubishi's adjustment to development methods. The new-generation Outlander expected to be launched around 2028 will switch to an independently developed Mitsubishi platform; the company judges this can bring higher profitability.

Independent development means bearing more development expenses and sales risks. In fiscal 2025, Mitsubishi's R&D expenses were 116.8 billion Yen. To allow limited budgets to undertake more tasks, the company plans to integrate platforms from five to three, shortening the development cycle from 45 months to 36 months.

Mitsubishi hopes to digest potentially increased investment after reducing alliance sharing through internal reuse and faster pace. Whether the independent platform is ultimately cost-effective depends on how many models it can support and how many vehicles it sells.

Elevate Brand with Niche Products

Mitsubishi places hope for the new round of growth on its strengths: four-wheel drive, off-roading, and durability, hoping consumers pay for these capabilities.

Behind this is a lesson. Mitsubishi once expanded scale by rushing sales, but deep discounts damaged brand value; after shocks like the pandemic arrived, it had to close factories and contract business. The new round of product plans needs to find reasons that better support selling prices.

The Pajero undertakes this task. On October 19, the new-generation Pajero launched in Thailand, produced by Mitsubishi's Thailand Laem Chabang plant; Japan and Australia plan to start sales in mid-December, and the Middle East, Central and South America, etc., will be targeted from the next fiscal year.

Mitsubishi Motors positions the new Pajero SUV as a flagship model in the Japanese market, thereby demonstrating its new strategy of creating niche models.

Pricing in the Japanese market best illustrates Mitsubishi's intent. The new Pajero is expected to start at 6.19 million Yen in Japan, the previous generation started at 4.53 million Yen.

Although the specs and cost environment of the two generations differ and cannot be simply compared, the new car is clearly striving for a higher price segment. Japanese pre-order bookings have reached 4,000 units, showing the Pajero still has brand appeal.

Mitsubishi also prepares to launch mid-size and compact Pajeros. The mid-size version is expected to launch in Japan around 2028-2029, sharing some parts with Outlander; the compact version targets around 2030. Large cars build brand image, smaller cars expand coverage, and shared parts help share investment.

The Japanese market provides a realistic basis for this approach. The Delica D:5 MPV and the light vehicle Delica Mini drove Mitsubishi's sales growth in Japan. The performance of the two cars indicates that Mitsubishi's niche products still have demand in the home market; the company hopes to replicate this experience to the Pajero family.

The Japanese market is also one of the export directions for Mitsubishi to reduce dependence on Southeast Asia. Southeast Asia accounts for about 30% of Mitsubishi's global sales, but operating profit in the region dropped from 63.6 billion Yen in fiscal 2019 to 22.9 billion Yen in fiscal 2025.

Competition from Chinese brands, plus weak demand in Thailand and Indonesia, is eroding Mitsubishi's original profit sources.

However, product upgrade does not equal unlimited price hikes. Some dealers are already worried that prices are rising too fast for some rural customers to afford.

Flagship models can attract new customers but may also keep existing familiar Mitsubishi customers at bay. After the first batch of Pajero orders, the more important question is whether demand will sustain.

Mitsubishi also incorporated used car business into growth plans. Previously, trade-in cars were mainly purchased and resold by individual dealers, with some circulating via auctions, at lower prices. In the future, HQ plans to strengthen centralized management and sell high-quality used cars through its own channels.

For old car owners, the higher the trade-in price, the less the price difference to pay for a new car; for customers with limited budgets, used cars are also an entry point to this brand. Whether this arrangement can support new car sales depends on whether Mitsubishi can improve vehicle residual value and circulation efficiency.

By fiscal 2029, Mitsubishi hopes to raise global sales from 797,000 units to 900,000 units, operating profit from about 75.5 billion Yen to 160 billion Yen, and operating profit margin to 4.5%.

Sales grow by only about 13%, but profits more than double.

Reversing from a 4.5% operating profit margin, 160 billion Yen operating profit corresponds to about 3.6 trillion Yen in revenue.

Mitsubishi needs to improve model structure and revenue per vehicle while increasing sales to support larger revenue scale. Reducing development and manufacturing costs helps turn increased revenue into profit.

Whether the Pajero can maintain its selling price, family models can share investment, and used car business can support new car trade-ins will affect how far this goal can go.

Build Core Independently, Borrow Shortcomings from Partners

Striving for more autonomy does not equal breaking up with Nissan. The product cooperation between the two has instead seen a clearer two-way division of labor.

Mitsubishi produces Rogue PHEV models for Nissan, and Nissan's mid-size pickup Navara developed based on Mitsubishi Triton; conversely, Mitsubishi prepares to use Nissan to return to the North American pickup market.

The US business needs this complementarity the most. Mitsubishi has no complete vehicle factories in the US, relying on exports from Japan, and faces tariff pressure.

Mitsubishi plans to introduce a pickup around 2029, based on products from Nissan's Canton plant in Mississippi, and continuously launch new cars, expanding the North American model lineup from 4 in 2024 to 8 around 2030.

Borrowing from partners to complete the product lineup can first stabilize the dealer network, buying time for independent model generations.

Honda has also entered this division of labor network. At the end of 2024, Honda and Nissan started business integration negotiations, Mitsubishi once considered joining; negotiations broke down in early 2025, but specific business cooperation continues.

Now, Honda and Mitsubishi are planning a pickup supply cooperation for the Southeast Asian market, with timing pointing to around 2028.

Mitsubishi's pickup products and manufacturing experience can help Honda expand business, and Mitsubishi has the opportunity to increase supply volume and share production costs.

Pure electric products reflect another trade-off of Mitsubishi: independent R&D focuses on hybrids, plug-in hybrids, and vehicle driving performance, while some pure electric models are purchased externally.

The pure electric version of Eclipse Sportback for North America is supplied by Nissan; the ASX VR-e announced in August is provided by Honghua Advanced, a joint venture electric vehicle company between Hon Hai Precision and Yulon Group. ASX VR-e is planned to launch in Australia and New Zealand within 2026, Mitsubishi conducted local road tests and exclusive suspension tuning for it.

This saves some investment from developing from scratch, filling the product lineup faster. But after putting the Mitsubishi badge on it, consumer expectations for driving feel, quality, and after-sales still need to be fulfilled by Mitsubishi.

For Mitsubishi with annual sales of less than 800,000 units, the direction is clear: master core models and key technologies independently, and supplement missing products, capacity, and development resources through cooperation.

Whether this path works depends on business results. From April to June 2026, Mitsubishi's operating profit increased by 80% year-on-year, but global sales dropped by 8%. Part of the profit improvement comes from exchange rates and selling prices.

Whether the Pajero family can expand sales, whether the independent platform can lower costs, and whether cooperative models can bring sustained revenue will determine if the goal of doubling profits can be realized.

Ten years ago, Mitsubishi first needed Nissan's money. Ten years later, it needs to make its four-wheel drive, plug-in hybrid, and manufacturing capabilities reasons for partners to want to procure and invest long-term.

The transfer restriction expiration opens up capital choices. Ultimately, what decides Mitsubishi's next chapter is what it can present in its own hands.