Honda and Nissan have agreed to explore a potential merger, which could create the world's third-largest automaker by sales. The Japanese companies signed a memorandum of understanding on Monday, with Mitsubishi Motors Corp. joining the discussions to combine their businesses. Japanese automakers are facing pressure to compete with global rivals in the electric vehicle market and are seeking to reduce costs.
Nissan, Honda, and Mitsubishi previously announced plans to share parts for electric vehicles, including batteries and autonomous driving software, in an effort to adapt to the rapidly changing automotive industry. A merger could result in a group valued at over $50 billion, allowing them to compete with industry giants like Toyota Motor Corp. and Volkswagen AG. The Associated Press reports that Toyota has technology partnerships with Mazda Motor Corp. and Subaru Corp., while Nissan's expertise in battery and electric vehicle production, along with gas-electric hybrid technology, could benefit Honda in developing its own electric vehicles and next-generation hybrids. The potential merger may impact consumers, according to Car Edge, Nissan may offer incentives on remaining 2024 and new 2025 models, but Honda's prices are not expected to change unless the merger significantly alters their business strategy. If Mitsubishi is incorporated into the merger, it could lead to substantial changes, possibly involving the elimination of less competitive car models from their inventory
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