Honda and Nissan in Talks for Holding Company to Combat Industry Disruption

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Automotive Industry,Mergers,Electric Vehicles

Japanese carmakers Honda and Nissan are reportedly discussing the formation of a holding company to share resources and navigate the challenges of a rapidly evolving automotive industry. The move, first reported by the Nikkei newspaper, aims to foster closer collaboration on technology amidst intense competition from Tesla and Chinese rivals. While details remain unclear, the talks suggest a strategic response to the pressures of the electric vehicle market and shifting consumer demand.

Japanese auto giants Honda and Nissan are in talks to set up a holding company, according to a person with knowledge of the matter, a move that would allow them to share more resources amid competition upending the global industry.

It was not immediately clear whether a new holding company was aimed at eventually establishing a full union between the two companies, although Nikkei said they were beginning merger talks. "As announced in March of this year, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other's strengths," the companies said in separate statements, adding they will inform stakeholders of any updates at an appropriate time.

Honda's market capitalization is 5.95 trillion yen , while Nissan's is 1.17 trillion yen . Any deal would be the biggest in the industry since the $52 billion merger between Fiat Chrysler and PSA in 2021 to create Stellantis. Europe's car sector is in turmoil, with thousands of jobs on the line as automakers suffer from a weakening market, high costs, a slower-than-expected takeup of EVs and increasing competition from Chinese rivals. Volkswagen has threatened to close plants in Germany for the first time in its 87-year history, cut jobs and slash wages to reduce costs and boost profit. Last week, Europe's top carmaker said it will close its Audi plant in Brussels next year.

Honda and Nissan in March agreed to cooperate in their EV businesses, and in August deepened their ties, agreeing to work together on batteries, e-axles and other technology.

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