The two Japanese firms are in talks to join forces in new holding company that could also include Mitsubishi
Japanese giants Honda and Nissan have confirmed that they will begin talks to merge their companies into a new automotive powerhouse – that could also include Mitsubishi.
Honda and Nissan have signed a Memorandum of Understanding (MoU) to hold discussions over a ‘business integration’ of the two companies in a new joint holding company. They have also signed a separate MoU with Mitsubishi for that firm to explore that firm becoming part of the holding company. The plans were first reported by Nikkei last week.
Talks will begin shortly, with the goal to reach a definitive agreement by June 2025, with the merger then going through in August 2026. If it happens the two brands would remain distinct, but behind the scenes they would standardise platforms and powertrains, share R&D and collaborate on manufacturing.
Nissan and Honda are Japan’s second- and third-largest car manufacturers, and combined to sell nearly 7.5 million cars worldwide last year.
In March this year the two firms announced plans to form a strategic partnership to develop electric vehicles, and in August that agreement was expanding to become far more wide-ranging, including research into software-defined vehicles.
The two firms have said the new agreement is intended to “maintain global competitiveness” and “deliver more attractive products”.
Nissan CEO Makoto Uchida said the MoU agreement “marks a pivotal moment as we begin discussions on business integration that has the potential to shape our future.”
He added: “By uniting the strengths of both companies, we can deliver unparalleled value to customers worldwide who appreciate our respective brands. Together, we can create a unique way for them to enjoy cars that neither company could achieve alone.”
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Honda CEO Toshihiro Mite added that “bringing together the resources including knowledge, talents and technologies that Honda and Nissan have been developing over the long years is essential to overcome challenging environmental shifts that the auto industry is facing.”
Mibe said that the two firms have “distinctive strengths”, and that by merging they can become “the one and only leading company that creates new mobility value through chemical reaction that can only be driven through synthesis of the two teams.”
How the merger would work
Honda and Nissan’s plan is to form a new joint holding company that would serve as the parent company of both firms. That would be achieved through a joint share transfer, which will need to be approved by shareholders from both firms. The exact share transfer ratio will be determined by the final agreement.
The new company would be listed on the Tokyo Stock Exchange, with the merger planned to go into place in August 2026.
The two firms will form a special committee that will look at how best to integrate. One key area the firm is looking at is standardising vehicle platforms of both companies across various segments, which would reduce production complexity and cost and increase economies of scale.
The firm would also streamline their powertrain portfolio, although the new entity would continue to offer pure combustion, hybrid, plug-in hybrid and electric models.
Another key area of the merger would be increasing their shared research and development, particularly in areas such as software-defined vehicles, which will be key to future growth.
Honda and Nissan will also look to optimise their manufacturing plants and service facilities, and also to integrate their supply chain network and back-office operations.
The deal would have significant effects on the wider car industry. Nissan has been in a long-time alliance with French company Renault, with both firms set to produce EVs on shared platforms in the coming years.
This isn’t the first time the two manufacturers have been linked to a merger: in 2020, the Financial Times reported that then Japanese prime minister Shinzo Abe had pushed the two firms into talks due to concerns over the deteriorating relationship between Nissan and Renault at the time. However, both companies were said to have rejected the plans.