Honda and Nissan agreed to examine the possibility of merging to form a joint holding company, potentially leading to the world’s third-largest automaker, according to Reuters.
The two companies would aim for combined sales of 30 trillion yen ($191 billion) and operating profit of more than 3 trillion yen as a result of the potential merger, according to the statement. The automakers intended to conclude talks by around June 2025 and then create a holding company by August 2026, after which both companies’ shares would be delisted.
The consolidation would create the world’s third-largest auto group by car sales after Toyota and Volkswagen to counter growing challenges from Tesla and Chinese rivals. Honda, Japan’s second-largest carmaker after Toyota, has a market capitalisation of more than $40 billion, whereas Nissan is valued at about $10 billion.
The integration of the two iconic Japanese brands would mark the biggest reorganisation in the global automotive industry since Fiat Chrysler Automobiles and PSA merged in 2021 to create Stellantis.
The merger with Mitsubishi Motors will take the Japanese group’s global sales to more than 8 million vehicles. South Korea’s Hyundai and Kia currently hold third place. In March, Nissan and Honda said they were considering co-operation in electrification and software development. They agreed to conduct joint research and in August expanded the co-operation to Mitsubishi Motors.
Last month, Nissan announced a plan to cut 9,000 jobs and 20 per cent of its global production capacity after sales fell in key markets in China and the US. Honda also reported worse-than-expected earnings due to lower sales in China.
However, Nissan’s former chairman, Carlos Ghosn, said in an online press conference with the Foreign Correspondents Club of Japan on Monday that the Honda-Nissan alliance was unlikely to succeed. Ghosn is wanted as a fugitive in Japan for jumping bail and fleeing to Lebanon. His arrest in 2018 for financial irregularities led Nissan into crisis.
