Honda and Nissan announced this Monday that they will begin negotiations for a merger, which should be completed by June 2025 and result in a new group by August 2026, marking a historic shift for the Japanese automotive industry that highlights the threat posed by Chinese electric vehicle manufacturers to some of the world’s most important car makers.
The merger of Honda, the second-largest automotive company in Japan, with Nissan, the third, will lead to the biggest revolution in the automotive industry since Fiat Chrysler Automobiles and PSA completed a merger in 2021 to create Stellantis.
“The rise of Chinese companies and new entrants has significantly changed the automotive industry “, said Honda CEO Toshihiro Mibe at a press conference he held with his counterparts from Nissan and Mitsubishi Motors in Tokyo. “We need to develop capabilities to compete against them by 2030; otherwise, we will lose this challenge”, concluded the Honda CEO.
Additionally, Mitsubishi Motors, of which Nissan is the main shareholder, is also evaluating the feasibility of joining the merger between Honda and Nissan.
“Honda and Nissan have begun to consider a business integration and will study the creation of significant synergies between the two companies across a wide range of fields. It is noteworthy that Nissan’s partner, Mitsubishi Motors, is also involved in these discussions. We anticipate that if this integration materializes, we will be able to deliver even greater value to a broader customer base”, said Makoto Uchida, CEO of Nissan.
Recall that the Japanese economic newspaper “Nikkei” reported last week that Honda and Nissan were exploring a possible merger to face increasing competition from major electric vehicle manufacturers, such as the American Tesla and the Chinese BYD, which has heightened the pressure on the two Japanese brands struggling to achieve sufficient profits to develop their electrification strategy.
