Honda Motor Co. and Nissan Motor Corp. are exploring a merger to create one of the world’s largest auto groups as they seek to better position themselves for the expensive technological transition reshaping the automotive industry.
On Monday, Honda and Nissan signed a memorandum of understanding to formally begin talks aimed at deepening a partnership that began this year. Over the next six months, the companies will discuss combining their operations under a holding company, with the goal of completing the merger in August 2026.
Honda and Nissan, Japan’s second- and third-largest automakers, would join a growing number of legacy auto giants, including General Motors and Volkswagen, that are deepening ties to share the financial burden of developing next-generation vehicles. The deal is seen as a lifeline in particular for Nissan, which has been slashing jobs and production amid faltering sales.
Honda and Nissan have decided they can better handle research and development and new investments as a combined force, Honda CEO Toshihiro Mibe said at a briefing in Tokyo on Monday.
“Current business models are being upended. It is not going to take 10 to 20 years for that to happen – it will come much faster,” Mibe said. “We need to have the right artillery in order to be competitive on that battlefield so we’re starting today.”
Nissan sells more than 3 million vehicles a year, while Honda sells nearly 4 million. A merger would position them as the world’s third-largest automaker group, behind Toyota, whose brands sold 11 million vehicles last year, and Volkswagen, which sold 9 million. Honda and Nissan together employ about 325,000 people.
The key question is whether even large, combined entities like Honda and Nissan can keep up with newer competitors. American company Tesla and China’s BYD have already established a commanding lead in electric vehicles and car technologies.
The new parent company of a merged Honda and Nissan would be listed on the Tokyo Stock Exchange. Mitsubishi Motors, a smaller Japanese automaker and longtime partner of Nissan’s, said it would also consider joining the new group.
Under the automakers’ current market valuations, the combination would be worth more than USD 50 billion.
