Nissan, Honda Ink MOU for Merger
It was more than rumors that Japanese automotive giants Nissan and Honda were eyeing a merger by 2026 which would revolutionize the industry with the appearance of what would be the third-largest auto group worldwide. The two companies signed a memorandum of understanding whereby discussions about integration via a joint holding company would go on during 2025, it was announced. Earlier this month, Nissan's CEO Makoto Uchida admitted that the company's situation was “severe”.
In addition, Mitsubishi Motors, of which Nissan owns a 24% stake, will decide next month whether to join the merger. Japanese automakers are trailing their international competitors in the electric vehicle field, including Tesla and China's BYD. “The rise of Chinese automakers and new players has changed the car industry quite a lot,” Honda CEO Toshihiro Mibe said. “We have to build up capabilities to fight with them by 2030, otherwise we'll be beaten,” he added.
According to a leading automotive industry expert, Nissan and Honda would be “positioning themselves for the future, which will be defined by electrification and autonomous technology.”
According to Mibe, Honda would retain a leading role in the partnership after the merger, which is expected to be completed by June with the new holding company listed on the Tokyo Stock Exchange by August 2026. As per an Associated Press estimate based on Mibe's statements, “a merger could result in a behemoth worth more than [US]$ 50 billion based on the market capitalization of all three automakers” - Honda, Nissan, and Mitsubishi, who seek to take on Toyota and Volkswagen. “We have come to the realization that in order for both parties to be leaders in this mobility transformation, it is necessary to make a bolder change than a collaboration in specific areas,” Mibe said.
Even after a merger Toyota, which rolled out 11.5 million vehicles in 2023, would remain the leading Japanese automaker. If they join, the three smaller companies would make about 8 million vehicles. In 2023, Honda made 4 million and Nissan produced 3.4 million. Mitsubishi Motors made just over 1 million.
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