Japanese automotive giants Honda and Nissan have revealed plans to merge, a move that would position them as the third largest car manufacturer in the world, behind Toyota and Volkswagen. The two companies signed a memorandum of understanding, which includes discussions with Mitsubishi Motors, a smaller member of the Nissan Alliance, regarding integration.
Facing challenges in keeping pace with rivals in the electric vehicle (EV) market, Japanese car manufacturers are looking to cut costs through this merger. Should the deal be finalized, it could create a company valued at over $50 billion (£39.77 billion), based on the combined market capitalization of the three firms.
According to Honda’s president, Toshihiro Mibe, the new management will initially be led by Honda while ensuring the preservation of each company’s brand and principles. The aim is to complete the merger by August 2026, although Mibe cautioned that “the possibility of this not being implemented is not zero,” citing several aspects that require further study and discussion.
Even with this merger, the new company would still trail behind Toyota, which remains the leading Japanese automaker. Toyota sold 11.5 million vehicles in 2023, while Honda, Nissan, and Mitsubishi combined for approximately eight million units.
This announcement follows an agreement made in August between the three companies to collaborate on shared components for electric vehicles, such as batteries, and to jointly research software for autonomous driving.
Nissan has faced difficulties since the scandal involving its former chairman, Carlos Ghosn, who was arrested in late 2018 on charges of fraud and misuse of company assets—allegations he denies. After being released on bail, Ghosn fled to Lebanon.
He described the proposed merger as a “desperate move.” Additionally, in Europe, car manufacturers are cutting jobs and closing factories in response to increased competition from Chinese exports, as reported by Sky News’ economics and data editor Ed Conway.
Credit: Sky News
