Japanese automakers Honda Motor Co. and Nissan Motor Co. are set to begin merger talks, aiming to create an automotive powerhouse with potential annual sales exceeding 8 million vehicles when including Mitsubishi Motors Corp., Nikkei reported
The two companies plan to sign a memorandum of understanding to operate under a single holding company, with stake proportions yet to be determined. The merger would combine Honda’s strength in hybrid technology with Nissan’s early-mover advantage in electric vehicles, gained through its Leaf model launched in 2010.
The potential consolidation comes as both manufacturers face mounting pressures in key markets. Honda reported a 30.7% drop in China sales for the January-November period, while Nissan experienced a 10.5% decline. In response, both companies have announced significant restructuring plans, with Honda cutting global production capacity by 500,000 units and Nissan reducing its workforce by nearly 10% worldwide.
The merger discussions follow an August strategic partnership between the companies on automotive components and software. The deal could eventually include Mitsubishi Motors, where Nissan holds a 24% stake.
This consolidation reflects broader industry trends, as traditional automakers seek alliances to compete with Tesla Inc. and Chinese manufacturers. Recent examples include General Motors Co.’s exploration of EV collaboration with Hyundai Motor Co. and BMW’s fuel cell partnership with Toyota Motor Corp.
