Top Japanese carmakers Nissan Motor and Honda Motor are exploring a merger to stay competitive in the full electrification era. The potential tie-up could create the world's third-largest auto group by vehicle sales, with 8 million sales annually, according to Citi. The merger report comes as many auto giants struggle with increased global competition from bigger EV makers such as Tesla and BYD.
Sources close to the matter say the domestic peers are expected to sign a memorandum of understanding shortly. The prospective tie-up would place Nissan-Honda-Mitsubishi behind fellow Japanese automaker Toyota. However, a mega-merger is expected to face several obstacles. Analysts have expressed concerns about potential political scrutiny in Japan due to job cuts, and the unwinding of Nissan's alliance with French vehicle manufacturer Renault. Peter Wells, professor of business and sustainability at Cardiff Business School's Centre for Automotive Industry Research, described the merger as a 'really important' development that could help Nissan and Honda pool assets, save money on costs, and create the technologies needed for the future
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