Japanese automakers Nissan Motor Corp. and Honda Motor Co. confirmed closer co-operation but denied rumours of a merger.
Nissan shares soared more than 22% following reports that the company might merge with Honda to form the world’s third-largest carmaker group. Honda’s share price, on the other hand, fell 3%. According to reports, Mitsubishi Motors Corp. was allegedly also mentioned in the talks.
In August, all three Japanese automakers announced that they planned to share components for electric vehicles and research autonomous driving software to adapt to the dramatic changes in the auto industry.
A tentative agreement was announced between Honda, Japan’s second-largest automaker, and Nissan, the third-largest, in March. The merger could result in a car giant worth about $55 billion, based on the market capitalisation of all three automakers.
Nissan has an alliance with Renault SA under review. Last month, the company announced it was cutting 9,000 jobs, or about 6% of its global workforce, and reducing global production capacity by 20% after reporting a quarterly loss of 9.3 billion yen ($61 million).
CEO Makoto Uchida said Nissan needed to become more efficient and better respond to market tastes, rising costs and other global changes. Honda, meanwhile, reported that its profits fell nearly 20% in the first half of its fiscal year from April to March from a year earlier. That came amid a drop in sales to China.
In 2023, Toyota produced 11.5 million vehicles, Honda made 4.2 million, and Nissan produced 3.4 million. Mitsubishi Motors made just over 1 million. Even after the alleged merger, Toyota would remain Japan’s largest automaker.
