Honda and Nissan, two of Japan’s largest automakers, will reportedly begin talks on a possible merger as they grapple with stiff competition in the rapidly evolving electric vehicle (EV) landscape.
Both companies released nearly identical statements confirming that they are exploring ways to deepen cooperation and will notify stakeholders in due course. While neither has directly announced merger talks, reports from Japanese media company Nikkei suggest a major strategic change could be in the offing.
Facing mounting pressure from Chinese EV makers and tight profit margins in their own electrification efforts, Honda and Nissan have forged closer ties in recent months. In March this year, the companies agreed to collaborate on electric vehicle development, and by August they had expanded their partnership to include EV batteries, e-axles and other key technologies.
Insiders indicate that the two automakers are considering placing themselves under a single holding company, which would streamline operations and potentially integrate Mitsubishi Motors – of which Nissan is the largest shareholder with a 24% stake – into the new entity. The development could reshape the global automotive landscape and become the industry’s biggest merger since Fiat Chrysler joined forces with PSA to create Stellantis in 2021.
A combined Honda-Nissan operation would be an answer to the increasing challenges faced by traditional automakers. Together, Honda and Nissan sold 7.4 million vehicles globally last year, but both have seen their influence diminish in China’s booming EV market. China accounted for nearly 70% of global EV sales last November, where homegrown brands like BYD have made a quantum leap, putting pressure on established players to consolidate resources for R&D, manufacturing and supply chains and to bundle.
Nissan’s recent commitments indicate the company remains committed to meeting emissions neutrality targets in Europe and Britain, despite market volatility. Plans to transform the Sunderland factory into a hub for electric vehicle production and build a third gigafactory underline Nissan’s ambition, while Honda also has significant interests in accelerating its own electrification strategy.
If Honda and Nissan were to complete a merger, it would mark one of the most significant realignments in the industry since Stellantis was founded two years ago. Stellantis’ own consolidation was driven in part by similar market pressures and cost-cutting imperatives. Amid these changing dynamics, global players including General Motors and Ford have scaled back investments in electric vehicles due to weak charging infrastructure, high financing costs and uncertain consumer acceptance.
As the automotive industry continues to change at breakneck speed, the potential merger between Honda and Nissan illustrates how legacy automakers are striving to adapt, join forces and remain competitive in a market that increasingly requires scale, innovation and rapid response. responds to new consumer needs.