Honda and Nissan merger talks reportedly underway

Honda and Nissan want to deepen their co-operation, Mitsubishi could also be included and a merger seems possible. This would create one of the largest car manufacturers in the world.

Honda and Nissan are in talks to deepen their relationship, two sources told Reuters. A merger is also possible. A merger would create a group worth over €50 billion with an annual production of 7.4 million vehicles. In terms of sales, the resulting group would be the third-largest car manufacturer in the world after Toyota and Volkswagen, according to the news agency.

The two Japanese companies had already agreed to jointly develop electric cars in March. However, Nissan's growing problems have now made closer cooperation even more urgent. Nissan has to cut 9,000 jobs and 20 per cent of its production capacity worldwide in order to save around €2.5 billion. In November, it was even said that Nissan only had 12 to 14 months to achieve a turnaround.

The reason for the plight is apparently falling sales figures in China and the USA as well as an 85 per cent drop in profits in the second quarter. But Honda is also in trouble. Here, too, the financial situation is said to be deteriorating and electric car sales are not meeting expectations. 

The e:Ny1 is the only Honda electric car in Germany, with just under 800 units sold so far this year

Following the discontinuation of the Leaf, the Ariya is Nissan's only electric car. Only 700 were sold by November

The talks between Honda and Nissan were first reported by the Japanese newspaper Nikkei. There was talk of increased technical co-operation, which should lead to improved competitiveness against Toyota. The establishment of a holding company as an umbrella organisation for Honda and Nissan or a merger had also been discussed, according to insiders. Mitsubishi could also be included; Nissan is the largest shareholder with a 24 per cent stake.

Honda, Nissan and Mitsubishi did not want to comment on the talks, and Renault, Nissan's major shareholder, also declined to comment. However, according to an insider, the three Japanese car manufacturers are planning to hold a press conference in Tokyo next Monday.  

More on the matter:

Official: Nissan and Honda team up for platforms, batteries and motors

Mitsubishi joins Honda and Nissan to beat Chinese competition

Honda and Nissan partner on electric car software

Nissan and Honda could team up to offer affordable electric cars

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The bottom line

The electric car market in Japan is still in its infancy with only 87,000 vehicles sold in 2023. This makes exports all the more important, with China likely to play a key role as the world's largest electric car market. However, a price war is raging there, driven by Tesla and BYD, in which the Japanese brands could be crushed. Honda and Nissan are now looking for ways to reduce their costs. Increased cooperation or even a merger could make this possible. 

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