Honda and Nissan to merge to fight Chinese competition

The Japanese automotive giant Honda is evaluating the possibility of a merger with its struggling compatriot Nissan. The agreement would also include Mitsubishi Motors, of which Nissan is the main shareholder, in the holding: thus the third largest automotive group in the world behind Toyota and the German Volkswagen, capable of competing on equal terms with rivals Tesla and BYD in the electricity sector.

Already linked by a “strategic partnership”, the two car manufacturers will begin negotiations to reunite under a single holding company and will “soon” sign a memorandum of understanding, writes the Japanese economic newspaper ‘Nikkei’.
“As announced in March and August, we are discussing possibilities cooperation in many sectors” and a merger “is among the possibilities”, a Honda spokesperson responded to the rumors circulating overnight. The two groups “are exploring various types of collaboration, to exploit their respective strengths”, Nissan said.

Honda is evaluating several options: merger, capital merger or holding company, Vice President Shinji Aoyama told Bloomberg. According to Japanese television TBS, the official announcement could arrive today. Honda and Nissan are second and third respectively Japanese manufacturer behind Toyota.

Overall Nissan, Honda and Mitsubishi have put together 4 million vehicles sold in the first half of 2024, compared to Toyota’s 5.16 million. On the Tokyo Stock Exchange, Nissan rose by 23.69%, Mitsubishi by 19.64%, while Honda fell by 3.03%. In Paris Renault, which still holds more than 22% of Nissan’s capital, gained more than 6%.