Nissan and Mitsubishi Motors to Explore Merger

The Nikkei financial newspaper reported on Tuesday that Nissan and Mitsubishi Motors were set to begin talks on a possible merger. The two Japanese companies, the second- and third-largest car manufacturers in Japan, aim to combat the increasing global competition from larger electric vehicle makers like BYD and Li Auto. In 2023, the firms combined sold 7.4 million vehicles, but face challenges from rising sales of Chinese rivals.

Nissan CEO Makoto Uchida stated that emerging players are advancing rapidly, and sticking to traditional approaches would not be enough to win the competition. The Nikkei reported that the carmakers were considering operating under a single holding company, with further details, including ownership stakes, to be determined later. Mitsubishi Motors, where Nissan holds the largest share at 24%, is also expected to be included in this holding company structure. This potential deal could be the largest in the automotive industry since the $52 billion merger between Fiat Chrysler and PSA in 2021, creating Stellantis, a global auto group with brands like Jeep, Dodge, Maserati, Peugeot, and Citroen. The announcement comes amidst declining profits for several major automakers in Europe, struggling with reduced demand and fierce competition while investing in the transition from gasoline and diesel production to electric vehicles. Nissan issued a statement in response saying the report's content was not officially announced by either company. They reiterated that Nissan and Mitsubishi Motors are exploring various collaboration possibilities, leveraging their respective strengths. They promised to inform stakeholders at the appropriate time if any updates arise

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