Honda and Nissan have confirmed that they will begin talks to merge their companies into a new consolidated holding company, one that could also include Mitsubishi. Today, Honda and Nissan have signed a Memorandum of Understanding (MoU) to consider ‘business integration’ of the two companies. The two brands have also signed a separate MoU with Mitsubishi to explore how the third Japanese company could become a part of the holding company.
- Honda and Nissan aim to reach definitive agreement by June 2025
- Combined Nissan and Honda sell nearly 75 lakh cars per annum
- New joint holding company will serve as the parent company by Aug 2026
The merger plans between the Japanese brands was first reported by Nikkei last week.
Discussions regarding the merger will begin shortly, and the aim is to reach a definitive agreement by June 2025. If the merger goes through, the two brands would remain distinct, but behind the scenes, they would standardise platforms and powertrains, share R&D, and collaborate on manufacturing. Nissan and Honda are Japan’s second- and third-largest car manufacturers, respectively, and combined, they retailed nearly 7.5 million cars last year across the world.
As we had reported in March, the two companies announced plans to form a strategic partnership to develop EVs. Following which, in August, that agreement was expanded upon and included research into software-defined vehicles.
How the Honda-Nissan merger would work
Honda and Nissan’s plan is to form a new joint holding company that would serve as the parent company. This would be achieved through a joint share transfer, which will need to be approved by shareholders from both companies. The exact share transfer ratio will be determined by the final agreement. The new holding company would be listed on the Tokyo Stock Exchange, with the merger planned to go into place in August 2026.
Nissan and Honda will form a special committee that will come up with the best way to integrate. One key area that is being looked at is standardising vehicle platforms of both companies across various segments, which would reduce production complexity and cost, while increasing economies of scale. The brands would also streamline their powertrain portfolio, although the new joint entity would continue to offer pure combustion, hybrid, plug-in hybrid and electric models.
Another key area of the merger would be increasing their shared research and development, particularly in areas such as software-defined vehicles, which will be key to future growth. Honda and Nissan will also look to optimise their manufacturing plants and service facilities, and also to integrate their supply chain network and back-office operations.
The merger will also have significant effects on the wider car industry. Nissan has been in a long-time alliance with French company Renault, and both companies are set to produce EVs on shared platforms in the coming years.
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