1 week Ago By [email protected] (Editorial Dept.)
TOKYO--Honda and Nissan are in talks to merge by 2026, they said on Monday, a historic pivot for Japan's auto industry that underlines the threat Chinese EV makers now pose to the world's long-dominant legacy car makers. The tie-up would create the world's third-largest auto group by vehicle sales after Toyota and Volkswagen. It would also give the two companies scale and a chance to share resources in the face of intense competition from Tesla and more nimble Chinese rivals, such as BYD.
The merger of Honda, Japan's second-largest automaker, with Nissan, its No. 3, would be the biggest reshaping in the global auto industry since Fiat Chrysler Automobiles and PSA merged in 2021 to create Stellantis in a $52-billion deal. Smaller Mitsubishi Motors, in which Nissan is top shareholder, was also considering joining and would make a decision by the end of January, the companies said.
The chief executives of all three held a joint press conference in Tokyo. "The rise of Chinese automakers and new players has changed the car industry quite a lot," said Honda CEO Toshihiro Mibe, citing technological trends of electrification and autonomous driving. "We have to build up capabilities to fight with them by 2030, otherwise we'll be beaten.
" The two companies would aim for combined sales of 30 trillion yen ($191 billion) and operating profit of more than 3 trillion yen through the potential merger, they said. They aimed to wrap up talks around June 2025 before setting up a holding company by August 2026, when shares of both companies would be delisted. Honda, which has a market capitalisation of more than $40 billion, roughly four times that of Nissan, will appoint the majority of the company's board, they said.
Combining with Mitsubishi Motors would take the Japanese group's global sales to more than 8 million cars. The current No. 3 is South Korea's Hyundai and Kia.
Honda and Nissan have been exploring ways to bolster their partnership, including a merger, Reuters reported last week. In March, both said they were considering co-operation on electrification and software development. They widened the collaboration to Mitsubishi Motors in August.
Last month, Nissan announced a plan to cut 9,000 jobs and 20% of its global production capacity after sales plunged in the key China and U.S. markets.
Honda also reported worse-than-expected earnings due to a China sales slump, although solid motorcycle and hybrid car businesses helped it secure a relatively stable financial base. "This is not a rescue of Nissan," however, Honda's Mibe said, adding that Nissan's business turnaround was a "prerequisite" for the merger..
