23 Dec: Japanese automakers Honda and Nissan have announced plans to merge their operations, aiming to form the world’s third-largest automaker by sales as the industry transitions away from fossil fuels. Mitsubishi Motors, part of Nissan’s alliance, has also agreed to join the discussions.
The companies signed a memorandum of understanding and plan to finalize a formal agreement by June 2026, listing a joint holding company on the Tokyo Stock Exchange. Honda will lead the new management while retaining the principles and brands of each company. The merger could create a combined entity valued at over $50 billion, enabling the trio to compete with global giants like Toyota and Volkswagen.
Honda’s president, Toshihiro Mibe, emphasized the need for bold changes to maintain leadership in the evolving automotive industry, particularly in electric vehicles and autonomous technologies. Nissan’s CEO, Makoto Uchida, acknowledged challenges but expressed confidence in delivering greater value to customers through integration.
This merger reflects broader industry trends toward consolidation, as traditional automakers face increasing competition from EV leaders like Tesla and China’s BYD. The collaboration would allow Honda to benefit from Nissan’s expertise in battery technology and hybrid powertrains, while Nissan could leverage Honda’s truck-based SUVs.
Despite the promising outlook, challenges remain. Nissan recently announced a 6% reduction in its global workforce and a 20% cut in production capacity due to financial struggles. Fitch Ratings downgraded Nissan’s credit outlook, though it acknowledged the company’s solid cash reserves of $9.4 billion.
News of the merger boosted the stock prices of both companies, with Nissan shares rising over 20% and Honda shares increasing 3.8%. Industry experts view this alliance as a critical move to enhance competitiveness in a rapidly changing global market.
