The story has been updated with Nissan’s official statement*
In a major development from the world of automobiles coming from the land of the rising sun, Honda and Nissan are reportedly contemplating on joining hands to counter stiff competition from local as well as global rivals. This would allow them to share more resources amid competition upending the global industry.
The talks are presumably in initial stages but if successful this would allow the two automakers to cooperate more closely on technology at a time when the industry is being revolutionised by the likes of Tesla and Chinese rivals for more battery-centric mobility solutions.
Honda-Nissan merger details
The discussions are aimed at creating an umbrella holding institution under which Honda and Nissan will fall. There is no complete clarity if the new joint venture will eventually establish a full union between the two companies. The evolving EV landscape presents significant challenges for automakers, including fierce competition and a slowdown in demand in Europe and the U.S. In response, these two carmakers have strengthened their partnership in recent months.
However, there are separate reports of Nissan and Honda being joined by a third Japanese automaker in this merger. In a report by CNN, Mitsubishi may come as the third party into this alliance although talks are in preliminary stages. It must be noted that Nissan and Mitsubishi are already tied up with Renault as part of a global entity for over a decade.
This development comes at a time when Honda and Nissan, Japan’s second- and third-biggest automakers, respectively, after Toyota, have been losing market share in China with rising demand in EVs. Till November 2024, China accounted for 70 percent of the global EV sales.
These developments have created significant ripples in the Japanese stock market. Nissan shares rose more than 20 percent in early trade while Honda was off more than one percent. Mitsubishi Motors — in which Nissan is the top shareholder – gained 14 percent. Shares of Nissan Motor surged as much as 24% to an intra-day high of JP¥ 417.60, however, the stock of Honda declined 4% to JP¥ 1,232 on the Tokyo Stock Exchange.
Nissan has now responded to the recent speculations. A spokesperson added, “The content of the reports that Honda, Nissan and MMC are considering a business integration is not based on an announcement from our company. As announced in March and August of this year, Nissan, Honda, and MMC are considering various possibilities for future collaboration including the content of the report, but no decisions have been made. If there are any updates, we will inform all stakeholders at the appropriate time.”
(With inputs from Reuters and CNN)
