Nissan and Honda will soon begin merger negotiations, according to a report from Japanese business publication Nikkei released on Tuesday. The two companies, along with Nissan partner Mitsubishi, are already officially collaborating around electrification technology and software development. Challenges in scaling up EV manufacturing and maintaining profitability amid stiff industry competition are said to be major factors in the proposed union.
Both automakers released identical statements in response to the news, saying, “As announced in March of this year, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other’s strengths.” Neither confirmed the beginning of merger talks, though both added that stakeholders will be notified of important updates at the appropriate time.
The automakers may create a holding company and soon sign a memorandum of understanding, per Nikkei, and whatever deal results is expected to include Mitsubishi. Following the news, U.S.-listed Nissan and Honda shares were trading 9% and 1.2% higher on the day, respectively.
Nikkei cited the strength of Chinese EV makers and Tesla specifically as primary instigators for Honda and Nissan potentially joining forces. And while Honda’s American subsidiary has posted solid numbers thus far through 2024, with total sales up 8.8% through the first nine months of the year, Nissan finds itself in a comparatively dire state. The average net profit for a U.S. Nissan dealership over the first half of 2024 was 70% less than during the same period in 2023, according to Automotive News. An executive at the embattled automaker recently predicted the company could only survive another 12 to 14 months as it exists today, barring a miraculous business turnaround or a new partner swooping in with a safety net of cash.
Honda could very well be that savior for Nissan. In fact, it was Honda CEO Toshihiro Mibe who reportedly raised the prospect of uniting the two automakers earlier this year, while they were already discussing working together on EVs. Should they merge, Japan’s auto industry would primarily be the domain of two major players between them and Toyota, which owns about 20% of Subaru and 5% of Mazda.
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