Honda Nissan Merger Talks Confirmed, Mitsubishi might join

Jawad

23 Dec 2024

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Honda Nissan Merger Talks Confirmed, Mitsubishi might join

Last week, various sources reported that Nissan and Honda had entered merger discussions, and today the two companies have officially confirmed these reports. The Honda Nissan collaboration aims to address the increasing competition from Chinese EV makers, which pose a significant threat to both companies in the evolving automotive market. Mitsubishi, in which Nissan holds the largest share, is also reportedly "considering" joining the merger.

Strategic Move Against Competition

If the merger between Honda Nissan partnership comes to fruition, the combined entity would become the world’s third-largest auto group by vehicle sales, following Toyota and Volkswagen. The merger would allow the new company to sell over 8 million vehicles globally each year, surpassing Hyundai and Kia, which are currently ranked No. 3. This partnership would significantly bolster the ability of both Honda and Nissan to compete with Tesla and Chinese EV manufacturers like BYD.

Competing with Global Giants

Honda, currently Japan's second-largest automaker, and Nissan, ranked No. 3, are joining forces to strengthen their position against the rising dominance of Chinese automakers. Honda’s CEO, Toshihiro Mibe, stated, "The rise of Chinese automakers and new players has changed the car industry quite a lot. We have to build up capabilities to fight with them by 2030, otherwise we'll be beaten." This Honda Nissan partnership represents one of the most significant changes in the global automotive landscape since the merger of Fiat Chrysler and PSA Peugeot Citroen in 2021 to form Stellantis.

Future of the Merger

The merger discussions between Honda Nissan (and potentially Mitsubishi) are expected to wrap up by June next year. If both parties reach an agreement, a holding company will be established by August 2026, and both Nissan’s and Honda’s shares will be delisted at that point. Honda, being the larger company with a market cap of over €36 billion, is set to appoint the majority of the new entity’s board, while Nissan, valued at about €9 billion, will play a supporting role in the new organization.

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