Honda and Nissan officially confirmed rumors that they are seeking to merge, the companies wrote in joint press release. Each will continue to operate under its own brand, but with a new joint holding company as the parent company. If Nissan-controlled Mitsubishi also joined the company, the combined group would become the world's third-largest automaker by sales and have a net worth of up to $50 billion.
“Today marks a turning point as we begin discussions on business integration that could potentially impact our future,” said Nissan CEO Makoto Uchida.
Integration talks are still preliminary, but the companies are moving forward. “We are still at the beginning of our review and have not yet made a decision on business integration,” Honda director Toshihiro Mibe said. However, he added that the companies intend to “find a direction for business integration opportunities by the end of January 2025.” After that, they hope to reach a “definitive agreement” regarding business integration by June 2025. Approval must be obtained from each company's shareholders and is contingent on Nissan making the necessary changes.
Nissan and Honda previously announced plans work together on electric vehicle components and software development, but the joint company will be much more integrated. According to the press release, the plan includes: standardization of vehicle platforms; consolidation of research and development groups; and optimization of production systems and equipment. All of this is usually aimed at cutting costs, so it could lead to significant layoffs in Japan and other countries.
Although both companies sell comparable vehicles such as the Nissan Rogue and Honda CR-V, some synergies seem possible. Nissan sells large pickup trucks and SUVs in the U.S. that Honda doesn't offer, and also has more experience making electric vehicles and EVs. On the other hand, Honda has relatively stable financial performance, while Nissan is struggling in the market, especially domestically.
Of course, Nissan is already part of the Renault-Nissan-Misubishi alliance. Nissan and Renault each own 15 percent of the other company's voting shares, and all three companies sold a combined 10.6 million vehicles worldwide in 2017, more than any other passenger car manufacturer at the time. The Alliance is also one of the largest electric vehicle manufacturers in the world, with more than 1 million units sold since 2009. If Nissan and Honda merge, it is unclear what will happen to the Alliance.