Japanese automotive titans, Honda and Nissan, have revealed plans to combine their operations.
This merger would position them as the third largest automobile producer in terms of sales, trailing only behind Toyota Motor Corp and Volkswagen AG.
The two corporations have indicated that they have formalized a memorandum of understanding, which will also involve the smallerNissan Alliance partner, Mitsubishi Motors, in discussions regarding integration.
Japanese automakers have been challenged to compete with their larger counterparts in the electric vehicle (EV) sector and are seeking to reduce expenses.
If the merger is successfully consummated, it might create an entity valued at over 50 billion dollars (£39.77bn) based on the market capitalization of the three automakers.
Honda CEO Toshihiro Mibe addresses a joint news conference alongside Nissan and Mitsubishi officials. Pic: AP
Honda will take the lead in the newly formed management initially, which will uphold the distinct principles and brands of each company, according to Honda’s president, Toshihiro Mibe.
The objective is to finalize the arrangement by August 2026, he noted, but added that there remains a possibility it may not transpire.
Mr. Mibe expressed that there are “aspects needing examination and dialogue” regarding the merger. “To be candid, the likelihood of this not materializing is not negligible.”
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Although the potential merger could elevate the new entity to a significant position in the market, it would still trail behind Toyota as the foremost Japanese vehicle manufacturer.
Toyota produced 11.5 million vehicles in 2023, while Honda, Nissan, and Mitsubishi Motors collectively manufactured around eight million.
This announcement follows a prior declaration by the trio in August to collaborate on sharing components for EVs, such as batteries, and conduct joint research on software for self-driving technologies.
Nissan has faced difficulties stemming from a scandal that originated from the arrest of its former chairman Carlos Ghosn in late 2018 on allegations of fraud and the misappropriation of company funds—claims he refutes. He was ultimately released on bail andescaped to Lebanon.
He characterized the proposed merger as a “desperate maneuver.”
Simultaneously, in Europe, automotive companies have been reducing their workforce and closing manufacturing plants as they contend with increasing competition from Chinese exports, as reported this month by Sky News’ economics and data editor Ed Conway.
