Honda Motor Co. and Nissan Motor Co. have initiated discussions about a potential merger that could result in the formation of the world’s third-largest automaker group by sales volume. This development comes as both companies seek to bolster their competitiveness against dominant figures in the electric vehicle (EV) market, including Tesla from the United States and Chinese rivals like BYD Co.
Sources indicate that Honda and Nissan are contemplating the creation of a holding company, a strategic move aimed at forging an automotive alliance that can effectively compete in the rapidly evolving EV landscape. Speculation regarding these merger talks has been fueled by recent rumors of a buyout offer for Nissan from Taiwan’s electronics leader, Foxconn, also known as Hon Hai Precision Industry Co. This potential merger is viewed as a defensive strategy by Nissan to counter Foxconn’s ambitions.
Honda President Toshihiro Mibe confirmed the discussions, stating that while they are exploring collaboration, no definitive decisions have been reached yet. An announcement regarding the merger talks could come as soon as next Monday.
The merger would unite Honda, Nissan, and Mitsubishi Motors Corp., potentially creating an alliance that rivals industry giants Toyota Motor Corp. and Volkswagen AG with a combined sales target of around 8 million vehicles, assuming Mitsubishi’s figures are included. Honda and Nissan had previously agreed to explore strategic partnerships, particularly in EV production and software technologies, with Mitsubishi joining later in the discussions.
Despite the hopeful outlook toward collaboration, both automakers are currently grappling with declining sales, especially in China, where local brands are capturing significant market share with more affordable EV options. Honda has recently lowered its profit forecast for the fiscal year due to weak auto sales, while Nissan announced job cuts and reduced output amid ongoing struggles in the U.S. and Chinese markets.
In recent trading, Nissan’s shares soared nearly 24 percent on news of the merger talks, while Honda’s shares experienced a decline.
This potential alliance underscores a significant industry trend where traditional automakers are increasingly seeking partnerships to enhance their capabilities in the face of technological shifts and fierce competition. Such collaboration could lead to innovative advancements in EV technology and help both companies regain their footing in key markets. Ultimately, this strategic move could herald a new era for Honda and Nissan as they aim to reclaim their competitive edge in the automotive industry.