Honda and Nissan to Explore Merger, Aiming for Third-Largest Automaker

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Auto Industry,Merger,Honda

Honda and Nissan have agreed to explore a potential merger, which could create the world's third-largest automaker. The two companies, along with Mitsubishi Motors, plan to work towards a formal merger agreement by June 2025. The proposed merger aims to leverage their combined scale and resources to compete more effectively in the rapidly evolving automotive industry, particularly in the transition to electric vehicles.

Honda and Nissan have signed a memorandum of understanding to explore a merger, which could create the world's third-largest automaker.The two companies will work towards a formal merger agreement by June 2025. / Photo: Reuters

Honda's president, Toshihiro Mibe, said Honda and Nissan will pursue unifying their operations under a joint holding company. Honda will initially lead the new management, retaining the principles and brands of each company. A merger could result in a behemoth worth more than $50 billion based on the market capitalization of all three automakers.

Nissan's CEO Makoto Uchida said there had been no direct approach to his company from Foxconn. He also acknowledged that Nissan's situation was “severe.” Nissan, Honda and Mitsubishi announced in August that they would share components for electric vehicles like batteries and jointly research software for autonomous driving to adapt better to dramatic changes centred around electrification, following a preliminary agreement between Nissan and Honda set in March.

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