Topline
Nissan Motor and Honda Motor plan to enter negotiations for a merger that will likely include Mitsubishi Motors, a deal intended to help the newly formed company compete in the growing electric vehicle market, the Japanese publication Nikkei reported Tuesday.
Negotiations for the Japanese automakers come amid growing competition in the electric vehicle … [+]
Key Facts
Nissan and Honda are considering operating under a holding company and will soon sign a memorandum of understanding, though their stakes in the newly formed entity have yet to be decided, according to Nikkei.
Both Japanese automakers plan to include Mitsubishi, in which Nissan is the largest shareholder with a 24% stake, under the holding company.
Nissan and Honda face increased pressure to compete in the EV market, with sales decreasing across China and the U.S. as Tesla and Chinese automaker BYD have rapidly expanded their production and sales growth, Nikkei reported.
Shares of Nissan and Honda rose by 8% and 1.5%, respectively, following the report.
Neither Nissan nor Honda immediately responded to requests for comment from Forbes.
Get Forbes Breaking News Text Alerts: We’re launching text message alerts so you’ll always know the biggest stories shaping the day’s headlines. Text “Alerts” to (201) 335-0739 or sign up here.
What To Watch For
A deal to merge Nissan and Honda would likely be the largest in the automotive industry since a $52 billion deal between Fiat Chrysler and PSA Groupe in January 2021 to form Stellantis, according to Reuters.
Big Number
7.4 million. That’s the combined number of vehicles sold globally by Nissan (3.4 million) and Honda (4 million) in 2023. Toyota was the highest-selling Japanese automaker that year with 11.2 million vehicles sold, a 7.2% increase year-over-year. Mitsubishi sold just over 800,000 vehicles.
Key Background
A reported merger between Nissan, Honda and Mitsubishi follows the Japanese automakers entering a strategic partnership in August to share automotive components and software. That deal was intended to have the three companies cooperate on their electric vehicle businesses while agreeing to develop batteries, axles and other technologies. In November, Nissan said its half-year net earnings had fallen more than 90% over the previous year while cutting its annual operating profit guidance by nearly 70%. Both automakers have struggled to sell vehicles across China and Southeast Asia, with Honda’s and Nissan’s sales volume between January and November dropping by 30.7% and 10.5%, respectively, in the regions. A likely merger between the two companies follows a Financial Times report indicating Nissan was seeking an investor to replace equity previously held by Renault, which had ended its decadeslong partnership with the company, and did not rule out Honda buying its shares.
Further Reading
