Japanese automakers Honda and Nissan have announced plans to join forces, forming the world’s third-largest automaker by sales as the industry transitions away from fossil fuels. The two companies have signed a memorandum of understanding to integrate their businesses, with smaller Nissan alliance member Mitsubishi Motors also joining the talks.
Honda’s president, Toshihiro Mibe, stated that Honda and Nissan aim to unify their operations under a joint holding company, with Honda initially leading the new management while retaining the principles and brands of each company. The formal merger agreement is expected by June, with completion targeted for August 2026.
The potential merger is driven by the need for Japanese automakers to catch up in electric vehicles and cut costs. The combined entity would be worth over $50 billion, positioning it to compete with industry giants like Toyota and Volkswagen.
Nissan, Honda, and Mitsubishi have already collaborated on sharing components for electric vehicles and researching autonomous driving software. Honda is seen as a possible savior for Nissan, which has faced challenges since the Carlos Ghosn scandal in 2018.
Nissan’s recent struggles include job cuts, production capacity reductions, and a quarterly loss. The company's credit outlook was downgraded to “negative” by Fitch Ratings, although it maintains a strong financial structure.
The merger announcement has boosted both companies' stock prices, reflecting investor optimism. The move aligns with the industry trend of consolidation as companies seek to enhance competitiveness in the evolving market landscape.
Japanese government officials have refrained from commenting on the specifics of the merger but emphasized the importance of Japanese companies staying competitive amid global changes in the automotive sector.
