Nissan and Honda officially announce merger plans

Honda and Nissan have officially confirmed rumors that they are seeking a merger, the companies wrote in a joint press release. Each would continue to operate under its own brand, but with a new joint holding company as parent. If Nissan-controlled Mitsubishi also joined, the combined group would become the world’s third-largest automaker by sales volume and have a net worth of up to $50 billion.

“Today marks a pivotal moment as we begin discussions on business integration that has the potential to shape our future,” said Nissan CEO Makoto Uchida.

Integration talks are still preliminary, but the companies are moving forward. “We are still in the beginning phase of our review and have not yet decided on a business integration,” said Honda CEO Toshihiro Mibe. However, he added that the companies aim to “find a direction for the possibility of business integration by the end of January 2025.” After that, they hope to have a “definitive agreement” on the business integration by June 2025. Approval must come from each company’s shareholders and is subject to Nissan executing a turnaround.

Nissan and Honda previously announced plans work together on electric vehicle components and software development, but the joint venture would be much more integrated. According to the statement, the plan includes: standardizing vehicle platforms; unify research and development teams; and optimize manufacturing systems and facilities. All of that is usually designed to cut costs, so it could mean significant layoffs in Japan and elsewhere.

Although the two companies sell comparable vehicles like the Nissan Rogue and the Honda CR-V, some synergy seems possible. Nissan sells full-size pickup trucks and SUVs in the U.S. that Honda doesn’t offer, and it also has more experience in electric and plug-in electric vehicles. On the other hand, Honda has relatively stable finances, while Nissan has struggled in the market, particularly at home.

Of course, Nissan is already in the Renault-Nissan-Misubishi Alliance. Nissan and Renault have a 15 percent voting stake in each other, and the three sold a combined 10.6 million vehicles worldwide in 2017, more than any other light vehicle maker at the time. . The Alliance is also one of the largest electric vehicle manufacturers in the world, with more than 1 million units sold since 2009. If Nissan and Honda were to merge, it is unclear what would happen to the Alliance.