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According to Reuters, automotive giants Nissan and Honda are in talks to finalize a “merger” by June 2025. If the deal goes through, a parent company will be formed and is expected to be operational by August 2026.
Both automakers will be holding a joint press conference next week with their respective leadership teams and Mitsubishi Motors, their partner brand.
Following the merger, Honda and Nissan’s stocks will be delisted, making way for the parent company’s shares. Honda will hold a majority of the leadership positions, including the top role in the new conglomerate.
This union will create a “big bang” in the global automotive industry, with the parent company’s market capitalization reaching an estimated 50 billion USD. This would mirror the restructuring between Fiat Chrysler and PSA in 2021.
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The decision on the parent company’s formation will be made in August 2025. Image source: Forbes. |
The new entity will inherit a combined global annual sales volume of over 8 million vehicles, surpassing Hyundai and Kia of South Korea. This will position the company as the third-largest automaker globally, only behind Toyota and Volkswagen.
This merger comes amidst relatively sluggish sales performances by both Honda and Nissan in key markets such as Europe and China. In the ranking of global sales for Q1-Q3 2024, BYD even surpassed Nissan to become the 17th best-selling automaker.
With the rise of cost-effective and privileged domestic Chinese automakers, Nissan and Honda have lost their stronghold, impacting their profitability. Uniting to save costs is a necessary strategy.
From now until August of next year, the two brands are expected to hold multiple agreement sessions regarding the new conglomerate’s survival.
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