Honda and Nissan unveil merger plans as talks continue
Honda and Nissan will push ahead with talks to unify under a joint holding company, possibly creating the world’s third largest carmaker by sales, it has been announced.
The Japanese carmaking giants confirmed on Monday a memorandum of understanding (MOU) agreement had been reached to proceed with discussions over a “strategic partnership,” which may also rope in Nissan alliance member Mitsubishi.
Speculation had been building over a possible blockbuster Honda and Nissan merger, after the Nikkei Newspaper revealed exploratory talks had taken place last Tuesday.
The plans come as global carmakers face increasing pressure from Elon Musk’s Tesla and Chinese electric car brands, which are steaming ahead amid an industry-wide switch to zero-emission vehicles.
The new deal would see the carmaker’s share intelligence and resources, while protecting both brands, according to Honda chief executive Toshiro Mibe. He expects the merged group could deliver revenue of around £152bn.
Mitsubishi will decide whether to join the new partnership by the end of Janaury 2025.
“At this time of change in the automobile industry, which is said to occur once every 100 years, we hope that Mitsubishi Motors’ participation in the business integration discussions of Nissan and Honda will lead to further social change, and that we will be able to become a leading company in creating new value in mobility through business integration,” Mibe said on Monday.
“Nissan and Honda will start the discussion from today onwards with an aim to clarify the possibility of business integration by around the end of January in line with the consideration of Mitsubishi Motors.”
Nissan chief executive, Makoto Uchida, said: “It is significant that Nissan’s partner, Mitsubishi Motors, is also involved in these discussions. We anticipate that if this integration comes to fruition, we will be able to deliver even greater value to a wider customer base.“
The companies said the MOU announced on Monday aimed to serve as “an option to maintain global competitiveness” in a rapidly changing climate for the wider automotive industry.
The possible mega-merger follows increasing consolidation in the global automotive sector, as brands grapple with wider industry threats.
Vivian Wong, Head of M&A Analytics, APAC at the financial data and intelligence platform Mergermarket, said the Japanese auto market was “primed for consolidation,” backed by government efforts to boost competitiveness against Chinese rivals.
Japan’s auto sector alone saw a 163 per cent surge in M&A in 2024, to around £8bn, according to data from Mergermarket.