Honda and Nissan merger on the table as talks confirmed

Both Honda and Nissan have signed a Memorandum of Understanding (MOU) to “start discussions and considerations toward a business integration between the two companies through the establishment of a joint holding company”. The talks have also included Mitsubishi Motors. 

The three companies together would form a Japanese automotive giant that could equip each firm with the tools to compete with threats of a booming Chinese car market and slower-than-anticipated consumer demand for battery-powered vehicles.

A definitive agreement will be reached in June 2025, with listing on the Tokyo Stock Exchange ahead of a share transfer and launch of the new joint company in August 2026. A previous update on the merger in August 2024 was quickly followed by slumps for both Honda and Nissan on the stock market. 

Globally the two companies sold 3.7 million and 3.4 million vehicles respectively in 2023 – making them the second and third-largest automotive companies in Japan, after Toyota. However, Nissan lost 16 per cent of its sales in China and Honda 10 per cent in the past year.

Honda and Nissan agreed to co-operate on EV projects back in March – which has since been met with concern in Japan, because it would be likely to result in significant domestic job losses under any rationalisation plan. Nissan is part of an alliance with Renault, too – a relationship that would also have to be unpicked. Renault Group has acknowledged Nissan and Honda's proposed merger, stating it will "consider all options based on the best interest of the Group and its stakeholders". 

Commenting on the MOU announcement, Nissan’s president Makoto Uchida said: “Honda and Nissan have begun considering a business integration, and will study the creation of significant synergies between the two companies in a wide range of fields. It is significant that Nissan's partner, Mitsubishi Motors, is also involved in these discussions. We anticipate that if this integration comes to fruition, we will be able to deliver even greater value to a wider customer base.”

Honda’s director Toshihiro Mibe added: “At this time of change in the automobile industry, which is said to occur once every 100 years, we hope that Mitsubishi Motors' participation in the business integration discussions of Nissan and Honda will lead to further social change, and that we will be able to become a leading company in creating new value in mobility through business integration. Nissan and Honda will start the discussion from today onwards, with an aim to clarify the possibility of business integration by around the end of January in line with the consideration of Mitsubishi Motors.”

Mitsubishi’s CEO Takao Kato said: “In an era of change in the automotive industry, the study between Nissan and Honda about a business integration will accelerate synergy maximisation effects, bringing high value also to the collaborative businesses with Mitsubishi Motors.”

Initially, the Nissan and Honda relationship was limited to an agreement to work together on batteries and technology, while in the summer the pair extended that relationship to include an agreement to share EV “intelligence and electrification” with Mitsubishi Motors.

This latest MOU would see Honda and Nissan work together on SDVs (software defined vehicles) while streamlining the production process of its cars. This wouldn’t only be limited to BEVs, either, with the new Honda/Nissan/Mitsubishi parent company still offering hybrid, internal-combustion and plug-in hybrid vehicles.

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