Tokyo, 24 December 2024: Honda and Nissan announced a groundbreaking partnership on Monday, aiming to create the world’s third-largest automaker by sales. The move comes as the automotive industry undergoes significant changes, particularly the shift away from fossil fuel dependency.
According to a statement from Nissan CEO Makoto Uchida, the integration is expected to offer “even greater value to a wider customer base” if it goes ahead. Mitsubishi Motors, a smaller member of the Nissan alliance, will also join the discussions on the merger, marking a significant step toward consolidating resources in response to growing pressures in the global market.
Japanese automakers, including Honda and Nissan, have faced difficulties keeping pace with global leaders in electric vehicle (EV) development. To catch up, the companies are exploring ways to cut costs and align their operations. Recent reports suggested that the drive for closer collaboration may also involve Foxconn, the Taiwan-based manufacturer known for its partnerships with tech giants like Apple.
A merger between Honda, Nissan, and Mitsubishi could create a powerhouse valued at over $50 billion, based on the market capitalizations of the companies involved. Together, the trio could rival Toyota Motor Corp and Germany’s Volkswagen AG. While Toyota, the leader among Japanese automakers, sold 11.5 million vehicles in 2023, the combined sales of Honda, Nissan, and Mitsubishi would total approximately 8 million units.
Despite potential synergies, the merger has sparked mixed reactions. Former Nissan CEO Carlos Ghosn, involved in a high-profile scandal in 2018, criticized the merger plans as a “desperate move.” Meanwhile, experts suggest Honda could gain access to Nissan’s vast experience in electric vehicle technology and battery production, which would benefit Honda’s own EV and hybrid developments.
The merger proposal follows earlier collaborative efforts between Honda and Nissan, such as sharing components for electric vehicles and jointly researching software for autonomous driving. This integration, however, comes at a time when Nissan is reeling from financial instability, marked by significant job cuts and a downgraded credit outlook.
Despite these challenges, Nissan’s share price saw a 1.6% increase following the merger announcement, with Honda’s shares rising by 3.8%.
Both companies are hoping the partnership will enhance their ability to compete globally, especially as automakers face increasing demands for electric and hybrid vehicles.
Japanese government officials, while not commenting directly on the merger, stressed the need for Japanese automakers to remain competitive amid the fast-changing global landscape. “Measures needed to survive international competition will be taken,” said Cabinet Secretary Yoshimasa Hayashi at a routine briefing.
