Honda and Nissan Officially Pursuing a Merger

Honda and Nissan are officially pursuing a merger, a deal that will see the two automakers—along with Mitsubishi—combine to become the third-largest in the world....
Honda and Nissan Officially Pursuing a Merger
Written by Matt Milano

Honda and Nissan are officially pursuing a merger, a deal that will see the two automakers—along with Mitsubishi—combine to become the third-largest in the world.

Reports emerged last week that the two Japanese automakers were exploring a merger, although no official word had been given. In a joint press release, Honda and Nissan executives said the merger would help the two companies further a carbon-neutral and zero-traffic-fatality society.

Nissan Motor Co., Ltd. (“Nissan”) and Honda Motor Co., Ltd. (“Honda”) 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.

To further accelerate their efforts toward achieving a carbon-neutral society and a zero-traffic-fatality society, Nissan and Honda signed an MOU on March 15 regarding a strategic partnership for the era of vehicle intelligence and electrification. Since then, the two companies have held discussions aimed at collaboration in various fields.

The two companies plan to integrate their management teams, as well as their automotive tech to become a “leading global mobility company.”

If the business integration can be realized, both companies can aim to integrate their respective management resources such as knowledge, human resources, and technologies; create deeper synergies; enhance the ability to respond to market changes; and expect to improve mid- to long-term corporate value. Additionally, Nissan and Honda can aim to further contribute to the development of Japan’s industrial base as a “leading global mobility company” by integrating Nissan and Honda’s four-wheel-vehicle and Honda’s motorcycle and power products businesses, enabling the brands of both companies to become more attractive and to deliver more attractive and innovative products and services to customers worldwide.

“Today marks a pivotal moment as we begin discussions on business integration that has the potential to shape our future,” said Makoto Uchida, Nissan CEO. “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.”

“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. Honda and Nissan are two companies with distinctive strengths,” added Toshihiro Mibe, Honda Director and Representative Executive Officer. “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.”

The Mitsubishi Question

Nissan is currently the largest shareholder in Mitsubishi, with a controlling stake of 34%. Although neither company has specifically addressed Mitsubishi, the automaker’s status is a major question in the merger scenario.

If Mitsubishi is included in the terms of the merger, it will help make the combined company the number three automaker in the world, a status that would help it improved its ability to compete at scale. The companies acknowledged the importance of the scale a merger would bring:

  • By standardizing the vehicle platforms of both companies across various product segments, the companies expect to create stronger products, reduce costs, enhance development efficiencies, and improve investment efficiencies through standardized production processes.
  • The integration is projected to increase sales and operational volumes, allowing the companies to reduce development costs per vehicle, including for future digital services, while maximizing profits.
  • By accelerating the mutual complementation of their global vehicle offerings – including ICE, HEV, PHEV, and EV models – Nissan and Honda will be better positioned to meet diverse customer needs around the world and deliver optimal products, leading to improved customer satisfaction.

We will continue to monitor the story as it develops.

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