In a strategic move to consolidate resources against mounting competition in the electric vehicle market, Honda and Nissan have begun discussions about a possible merger, which would involve establishing a holding company to integrate both as subsidiaries, with the potential inclusion of Mitsubishi Motors.
Japan's leading business daily Nikkei and public broadcaster NHK reported that Nissan confirmed on December 18, 2024, that negotiations with Honda encompass several possibilities. During a media interview in Tokyo, Honda's president Toshihiro Mibe also confirmed discussions with both Nissan and Mitsubishi Motors, stating they are exploring varied cooperative options. However, no firm agreements have been reached yet.
Sources familiar with the matter indicate Honda and Nissan might soon sign a memorandum of understanding to finalize the specifics, including investment ratios for the proposed holding company.
As Nissan holds its position as the largest shareholder in Mitsubishi Motors, the consolidation could position the trio's combined sales volume at over 8 million units, edging closer to automotive giants Toyota and Volkswagen. This would mark a pivotal restructuring within the Japanese automotive landscape, with two main groups emerging: "Toyota" and the prospective "Honda + Nissan + Mitsubishi."
These discussions come amid rapid technological shifts, including electric and autonomous vehicles, with Chinese competitors rapidly gaining ground. For Honda and Nissan, achieving a larger scale is vital to remain competitive. Nissan recently adjusted its relationship with Renault to gain more operational independence, while Honda has paused collaborations with General Motors regarding electric and autonomous vehicle technologies.
Since March 2024, Honda and Nissan have been exploring cooperative ventures, culminating in a broad business collaboration by August, including the standardization of onboard software and components. Mitsubishi Motors has also shown interest in joining this alliance. Each company brings unique strengths to the table: Honda with its leading hybrid electric vehicle technology, and Nissan with its pioneering efforts in electric vehicle deployment, notably through its Leaf model.
Despite its technological advancements, Nissan has seen a sharp decline in performance, particularly in the US and China, leading to reductions in global production and workforce alongside corporate restructuring. Meanwhile, Honda's willingness to pivot from its long-held principle of "proprietary technology" underscores its commitment to navigate through an unprecedented period of transformation in the automotive sector.
