Nissan Motor Corporation and Honda Motor Company plan to begin merger talks, according to reports in Japan, as the two companies struggle to compete in the global battery electric vehicle (BEV) market with a surging Chinese automotive industry and US manufacturer Tesla.
The two Japanese automakers did not immediately confirm these reports, with both repeating earlier statements that they are exploring “various possibilities for future collaboration to leverage each other's strengths.”
The two companies have collaborated on various projects over the years, mainly to share development costs and increase economies of scale in low-volume vehicle segments, including mini-vehicles and commercial vheicles, and in key technologies such as hybrid and autonomous driving. Earlier this year they launched a strategic alliance in the BEV segment, but remain far behind their global rivals in terms of model roll-out.
With Renault continuing to sell down its stake in Nissan, reports earlier this month suggested that Nissan was searching for a new “anchor” investor to help it navigate through a difficult 2025, with Honda seen as the most likely candidate.
Reports in Japan today suggested that the two companies will soon sign a memorandum of understanding (MoU) to establish a common holding company, which would help speed up collaboration and cost-sharing between the two companies. Mitsubishi Motors is also expected to be invited to join the merger, which would create one of the world's largest automotive groups with global output of close to 8 million vehicles annually.
In the first ten months of 2024 Nissan reported a 7% decline in global vehicle output to 2,651,780 units, while Honda’s production fell by 9% to 3,131,094 units in this period and Mitsubishi Motors’ output was down by 7% to 792,816 units.
Earlier this year Honda and Nissan both announced plans to substantially increase their respective BEV sector investments in the second half of the decade, to close the gap with global leaders such as BYD Auto and Tesla.
