Honda Motor Co. and Nissan Motor Co. have announced their clear intentions to merge, potentially creating the world’s third-largest auto group by vehicle sales, following Toyota and Volkswagen. According to Japanese broadcaster NHK, the agreement could be finalized as soon as June 2025.
The two companies aim to establish a holding company, led by a president chosen by Honda. Meanwhile, Japanese news agency Yomiuri reported separately that the merger is set for 2026, with the holding company serving as the listed entity.
Both companies, particularly Nissan, are facing challenges due to the rise of Chinese electric and hybrid vehicles. Nissan’s declining sales in the US and China have led the company to slash jobs, reduce production capacity, and lower its annual profit outlook by 70%.
Nissan’s shares settled 1.58% higher following the announcement of the timeline, while Honda gained 3.82%.
Previously, Nissan had been in talks with Foxconn, which showed interest in acquiring the company. However, the iPhone-maker decided to pause its pursuit until the outcome of the discussions between Nissan and Honda, according to a person familiar with the matter.
The merger between Honda, Nissan, and possibly Mitsubishi Motors (Nissan’s junior partner) could effectively divide Japan’s automobile industry into two factions: the three companies versus Toyota Motor Corp. and its partners, including Mazda Motor Corp., Subaru Corp., and Suzuki Motor Corp.
Meanwhile, Carlos Ghosn, former Nissan chairman and wanted fugitive who escaped to Lebanon after being convicted of financial wrongdoing, expressed doubt about the success of the Honda-Nissan alliance. He argued that the merger has no industrial logic or merit, as both companies operate in the same markets with similar brands and products.
