Honda and Nissan have begun talks on a potential merger to create the world’s third-largest auto group by sales, following Toyota and Volkswagen.
The merger, which could include Mitsubishi Motors, reflects growing pressure from Chinese EV makers like BYD and global players like Tesla.
The proposed integration targets combined sales of 30 trillion yen ($191 billion) and operating profits exceeding 3 trillion yen by 2030. Talks are expected to conclude by June 2025, and plans to establish a holding company by August 2026 will lead to the delisting of Honda and Nissan shares.
Honda, Japan’s second-largest automaker, and Nissan, the third-largest, have faced declining sales in key markets like China and the U.S., losing ground to Chinese brands offering innovative electric and hybrid vehicles. The companies have collaborated on electrification and software development since March and expanded the partnership to include Mitsubishi Motors in August.
While the merger could reshape the global auto industry, skeptics like former Nissan chairman Carlos Ghosn doubt its success, citing a lack of synergy. Meanwhile, Renault, Nissan’s largest shareholder, is open to the tie-up.
Stock markets reacted positively, with Honda shares rising 3.8%, Nissan gaining 1.6%, and Mitsubishi Motors surging 5.3%, signaling investor optimism about the potential deal.