Honda and Nissan have officially confirmed rumors that they are trying to merge, the companies wrote in a joint press release. Both will continue to operate under their own brands, but with a new joint holding company as the parent. If Nissan-controlled Mitsubishi also joins in, the combined group will become the world’s third-largest automaker by sales volume and have net assets worth up to $50 billion.
Nissan CEO Makoto Uchida said, “Today is a critical moment as we begin discussions on business integration that have the potential to shape our future.” The integration talks are still preliminary, but the companies are moving forward. Honda director Toshihiro Mibe said, “We are still in the stage of starting our review and have not yet decided on business integration.”
However, he added that the companies’ goal is 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” regarding business integration by June 2025. Approval must come from each company’s shareholders and it’s subject to Nissan executing the change.
Nissan and Honda previously announced plans to work together on EV components and software development, but the combined company will be far more integrated. According to the press release, the plan includes: standardizing vehicle platforms; integrating research and development teams; and optimizing manufacturing systems and facilities. All of this is generally designed to cut costs, so it could lead to significant layoffs in Japan and elsewhere.
While both companies sell comparable vehicles such as Nissan’s Rogue and the Honda CR-V, some synergy seems possible. Nissan sells large pickup trucks and SUVs in the US that Honda doesn’t and also has more experience in EVs and plug-in electric vehicles.
Honda, on the other hand, has a relatively stable financial position while Nissan is struggling in the market, especially domestically.
Of course, Nissan is already in the Renault-Nissan-Misubishi alliance. Nissan and Renault have a 15 percent voting stake in the 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 one of the world’s largest EV makers, having sold more than 1 million units since 2009. If Nissan and Honda merge, it’s unclear what will happen to the alliance.