- Honda and Nissan are close to starting merger talks, according to a report from Japan
- Any successful merger could potentially lead to Mitsubishi also joining the party
- Nissan, in particular, is struggling, and an insider recently warned the automaker only has 12–14 months to survive
Two of Japan’s biggest automakers could merge to form a national champion to fend off competition in the electric vehicle segment, according to a report from Nikkei.
The Japanese news daily reported on Tuesday that Honda and Nissan are close to starting merger talks and that a successful merger could eventually add Mitsubishi as a partner in a three-way tie-up.
The automakers’ combined sales in 2023 totaled more than eight million. Such a figure for the merged company would make it the third-biggest automaker by sales volume, behind Toyota and Volkswagen Group, which sold 11.2 million and 9.2 million vehicles in 2023, respectively.
According to the report, Honda and Nissan are close to signing a memorandum of understanding, and if all goes to plan, the merged automakers would operate under a holding company.
2024 Mitsubishi Outlander
The automakers are already closely linked. Honda and Nissan have been collaborating on EV and software development since March, and Mitsubishi joined the partnership in August. Nissan already owns 34% of Mitsubishi, and Nissan and Mitsubishi also share vehicle platforms and technology via their existing alliance, which also includes Renault. Mitsubishi has also collaborated with Honda in the past, most recently in the area of battery leasing for EVs via a joint venture called Altna.
Japanese automakers are consolidating in an effort to reduce costs but also catch up in the EV race after years of promoting hydrogen fuel cells as an alternative. Toyota, Mazda, and Subaru also announced in May plans to collaborate on internal-combustion engines.
The moves are aimed at fending off competition from international rivals, particularly from China, which last year overtook Japan to become the world’s largest vehicle exporter.
Nissan, in particular, is struggling. The automaker announced plans in October to lay off approximately 9,000 employees, representing 6.7% of its global workforce, and to cut production capacity by 20% due to declining sales, primarily in the U.S. and China. The Financial Times also reported in November that an insider has warned Nissan only has about 12–14 months to survive.