Japanese car manufacturers Honda and Nissan have taken a huge step towards a merger, as they confront the reality of an automotive market that is shifting ever further towards electrification.
The move comes in the face of a major threat from Chinese vehicle maker BYD and America’s Tesla, both of whom are racing ahead in the rapidly expanding electric car marketplace, which is being hastened by many countries mandating a shift towards cleaner energy transportation.
On Monday, the Japanese brands announced that they plan to setup a holding company by August 2026, by which time their shares will be delisted. The new company would be the third largest-selling automaker in the world, behind Toyota and Volkswagen.
Honda and Nissan have been collaborating since March, carrying out joint research into the next generation of electric cars. Nissan has been particularly strong in the budget EV market with its Leaf model, and has been racing in the all-electric Formula E open wheel series since 2018.
“Creation of new mobility value by bringing together the resources including knowledge, talents, and technologies that Honda and Nissan have been developing over the long years is essential to overcome challenging environmental shifts that the auto industry is facing,” said Honda President and CEO Toshihiro Mibe.
“Honda and Nissan are two companies with distinctive strengths. We are still at the stage of starting our review, and we have not decided on a business integration yet, but in order to find a direction for the possibility of business integration by the end of January 2025, we strive to be the one and only leading company that creates new mobility value through chemical reaction that can only be driven through synthesis of the two teams.”
Nissan cut its global workforce by 9,000 in November, stating that it was “facing a severe situation” and was slashing costs by almost $2 billion. Nissan’s alliance member, Mitsubishi Motors, is also looking to join the deal, adding further manufacturing expertise to the upcoming venture.
Of its future, Nissan’s President and CEO Makoto Uchida said: “Today marks a pivotal moment as we begin discussions on business integration that has the potential to shape our future. If realized, I believe that by uniting the strengths of both companies, we can deliver unparalleled value to customers worldwide who appreciate our respective brands. Together, we can create a unique way for them to enjoy cars that neither company could achieve alone.”
