Nissan and Honda officially announce plans to merge

Honda and Nissan officially confirmed rumours that they are following the merger, the companies wrote in a press release. Each will continue to operate under its own brand, but with a new joint venture as a parent. If Nissan-led Mitsubishi came back, the combined group would be the world’s third-largest carmaker by sales and would have revenues of $50 billion.

“Today is an important moment as we begin discussions about a business combination that can shape our future,” said Makoto Uchida, CEO of Nissan.

Merger talks are still in their early stages, but the industry is making progress. “We are still at the beginning of the review and have not decided on a business combination,” said Honda CEO Toshihiro Mibe. However, he added that the companies want to “find guidance on the possibility of a business combination by the end of January 2025.” After that, they hope to have a “definitive agreement” about the business integration by June 2025. The approval must come from the shareholders of each company and it is necessary for Nissan to change.

Nissan and Honda already announced plans to work together on EV products and software development, but a joint venture would be more integrated. According to the press release, the plan includes: organizing traffic platforms; coordinate research and development teams; and maintenance of production machinery and facilities. All of this is designed to cut costs, so it could mean layoffs in Japan and elsewhere.

Although the two companies sell similar vehicles like Nissan’s Rogue and Honda CR-V, some synergy seems possible. Nissan sells large pickup trucks and SUVs in the US that Honda does not offer and also has extensive experience in EVs and electric vehicles. On the other hand, Honda has stable income while Nissan has been struggling in the market, especially at home.

Also, “Nissan” is already “Renault-Nissan-Misubishi Alliance”. Nissan and Renault have a 15 percent share of the rest, and all three sold a combined 10.6 million vehicles worldwide in 2017, more than any other light car maker at the time. The Alliance is one of the largest EV manufacturers in the world, with over 1 million units sold since 2009. If Nissan and Honda were merged, it is unclear what the Alliance would look like.