Honda and Nissan have officially agreed to engage in merger talks over the next six months. The potential deal aims to form the world’s third-largest automaker, enhancing both companies’ ability to compete against the rising challenge posed by Chinese car manufacturers. This strategic move reflects their efforts to pool resources and strengthen their global position in the rapidly evolving automotive industry.
The two automakers signed a memorandum of understanding (MOU) to explore the potential for business integration. This decision follows a series of strategic collaborations between the two automotive giants, including agreements to advance electric vehicle (EV) technologies and research into software-defined vehicles (SDVs).
The merger, if realized, will unite their resources, including R&D, manufacturing, and global supply chains, with the goal of creating synergies that will drive innovation and competitiveness in the fast-evolving automotive industry. The two companies have laid the groundwork for this integration through prior partnerships focused on electrification and autonomous vehicle technologies.
Marking a significant step forward, the MOU signed on December 23, 2024, sets the stage for deeper collaboration aimed at tackling the automotive industry’s most pressing challenges, such as carbon neutrality and zero traffic fatalities. Mitsubishi, a smaller Japanese automaker already allied with Nissan, will also take part in the merger discussions, contributing to the collaborative efforts alongside Honda and Nissan.
By merging key business functions, Nissan and Honda aim to standardize vehicle platforms, optimize manufacturing systems, and streamline their supply chain operations. This integration is expected to bring substantial cost savings and improve operational efficiency, allowing both companies to respond more quickly to market changes. The combination of their R&D efforts will also enable faster development of cutting-edge technologies, particularly in the area of electrification.
Marking the announcement, Nissan Director, President, CEO and Representative Executive Officer Makoto Uchida said: “Today marks a pivotal moment as we begin discussions on business integration that has the potential to shape our future. If realized, I believe that by uniting the strengths of both companies, we can deliver unparalleled value to customers worldwide who appreciate our respective brands. Together, we can create a unique way for them to enjoy cars that neither company could achieve alone.”
Since its alliance with Renault collapsed, Nissan has faced significant financial challenges. Profits for the six months ending in September plummeted 94% year-on-year, primarily due to losses in auto operations. The company reported a slim profit from its financing business. In response, Nissan plans to reduce manufacturing output by 20%, laying off 9,000 workers and revising its full-year operating profit forecast downward by 70%. This financial strain underscores Nissan’s urgent need for a strategic merger partner.
Honda Director and Representative Executive Officer Toshihiro Mibe said: “Creation of new mobility value by bringing together the resources including knowledge, talents, and technologies that Honda and Nissan have been developing over the long years is essential to overcome challenging environmental shifts that the auto industry is facing. Honda and Nissan are two companies with distinctive strengths.”
The merger will culminate in the formation of a joint holding company, which will oversee both Nissan and Honda as wholly owned subsidiaries. Aiming to further strengthen their financial position, the companies plan to list the joint holding company on the Tokyo Stock Exchange in August 2026, marking the beginning of a new era of collaboration.
The companies are also exploring synergies in areas such as purchasing, finance, and human resources, aiming to create a more robust foundation for future growth. The integration could result in a sales revenue exceeding 30 trillion yen, positioning Nissan and Honda as formidable players in the global automotive sector.
The move comes at a time when the automotive industry is undergoing a seismic shift towards electric and smart vehicles. By combining their strengths, Nissan and Honda hope to lead the charge in the next phase of automotive innovation. The creation of a joint holding company will allow both brands to continue their legacy of delivering high-quality, innovative products while responding to the growing demand for sustainable and intelligent mobility solutions.
“We are still at the stage of starting our review, and we have not decided on a business integration yet, but in order to find a direction for the possibility of business integration by the end of January 2025, we strive to be the one and only leading company that creates new mobility value through chemical reaction that can only be driven through synthesis of the two teams.” Toshihiro added
The integration discussions are expected to culminate in a definitive agreement by mid-2025, with shareholder approval and regulatory clearances to follow. However, as both companies emphasize, the timeline is flexible, and the final structure of the integration will be determined by careful analysis of synergies and due diligence.
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