Merger talks between Honda and Nissan may commence
- Merger discussions could lead to the formation of a holding company
- Focus on EVs, hybrids, and software integration
Reports from Nikkei suggest that Honda and Nissan are nearing the start of merger talks in response to growing competition in the electric vehicle market.
Nikkei reported on Tuesday that Honda and Nissan are on the verge of signing a memorandum of understanding as the initial step towards merger discussions, with the possibility of Mitsubishi joining as a third partner. Nissan currently holds around 34% of Mitsubishi shares, and there has been collaboration between the two automakers in platform sharing.
According to the report, the proposed merger would see the combined automakers operating under a holding company, with competition from Tesla and Chinese automakers in the EV sector being a key driver behind the talks.
2023 Nissan Ariya e-4orce
Earlier in March, Honda and Nissan announced a memorandum of understanding for a “strategic partnership” focusing on vehicle electrification and intelligence, covering areas such as EVs, hybrids, and software. Mitsubishi was expected to join this partnership in August. The existing alliance between Nissan, Mitsubishi, and a French automaker has also collaborated with Honda in the past, including on the Altna battery-leasing joint venture.
Combined sales of Honda and Nissan in 2023 exceeded 8 million vehicles, positioning the merged entity as the third-largest automaker by sales volume after Toyota and the Volkswagen Group, which sold 11.2 million and 9.2 million vehicles in 2023, respectively.
A potential full merger could serve as a vital lifeline for Nissan, which announced plans in October to reduce its workforce by approximately 9,000 employees (6.7% of its global workforce) and decrease production capacity by 20% due to declining sales, particularly in the U.S. and China.
2025 Honda Civic Hybrid
Both automakers are in the process of transitioning to electric vehicles, with Honda set to launch its 0 Series from 2026 onwards and Nissan gearing up for a new generation of the Leaf, along with larger models for production in Mississippi.
Hybrids present immediate integration opportunities. Honda’s two-motor hybrid system could potentially replace Nissan’s e-Power hybrid system, which has yet to debut in the U.S. despite years of discussion. Nissan, on the other hand, could lead the charge in electrifying pickup trucks and SUVs—categories that Honda currently lacks in its lineup.