Mitsubishi Motors is reportedly considering not participating in the proposed merger between Nissan and Honda, a move that could form the world’s third-largest auto group with an annual output of 7.4 million vehicles, according to anonymous sources familiar with the matter. Shares of Mitsubishi Motors fell more than 6% in early trading on Friday, while Nissan’s shares dropped by 1.6%, following the news.

In a statement, Mitsubishi Motors acknowledged media reports regarding its potential participation in the business integration framework being discussed by Nissan and Honda but clarified that no decision had been made. The company added it was evaluating various possibilities.

The Yomiuri newspaper reported that Mitsubishi Motors may opt out due to concerns over its limited ability to influence management decisions in the proposed joint holding company, given its relatively smaller size. Nissan holds a 24% stake in Mitsubishi Motors, making it the top shareholder.

Nissan and Honda announced in December 2024 that they had entered formal discussions for the merger, aiming to finalize talks by June 2025 and establish a joint holding company by August 2026. The plan involves delisting the shares of both companies.

For now, Mitsubishi Motors is expected to maintain its current structure and concentrate on expanding its market share in Southeast Asia, according to Yomiuri.

When approached, a Nissan spokesperson referred to Mitsubishi Motors' official statement without offering further details, while Honda has yet to comment.