Nissan and Honda Forge Ahead with Merger Plans Amid EV Market Surge

TOKYO — In a bold move to navigate the shifting landscape of the automotive industry, Nissan and Honda have declared intentions to merge, aiming to become the third-largest automaker by sales globally.

The automotive giants formalized their commitment with a memorandum of understanding, with Mitsubishi Motors also joining the conversation for a potential business integration.

In Japan, the push towards electric vehicles has been slower than in other markets, putting pressure on local manufacturers to innovate or collaborate to catch up with global leaders like Tesla and BYD from China.

Honda’s president, Toshihiro Mibe, emphasized the merger’s goal to create a unified operational structure under a new holding company, where Honda would steer the leadership while preserving individual brand identities.

The timeline set for this ambitious project includes finalizing merger agreements by June and listing the new entity on the Tokyo Stock Exchange by August 2026, marking a significant strategic shift.

Mibe acknowledged the uncertainties, stating that while the merger is planned meticulously, there remains a non-zero chance of the deal not coming to fruition due to various complexities.

The envisioned conglomerate could command a market value exceeding $50 billion, enhancing their competitive edge against giants like Toyota and Volkswagen, as they leverage collective strengths in technology and scale.

Recent rumors linking Nissan with Foxconn, the Taiwanese electronics titan, for share acquisition were clarified by Nissan CEO Makoto Uchida, denying any direct approach from Foxconn amidst Nissan’s acknowledged financial strain.

Despite this potential merger, Toyota will still hold its dominance in Japan, having produced 11.5 million vehicles last year, overshadowing the combined output of Nissan, Honda, and Mitsubishi, which currently stands at around 8 million annually.

Mibe highlighted the necessity of this merger, stating that to lead in the new era of mobility, a more radical change than mere collaboration in specific areas is required.

Prior to this announcement, the three companies had already set the stage for cooperation, agreeing to share EV components and research autonomous driving software, signaling a commitment to adapt swiftly to the electric vehicle revolution.