UPDATE: Honda and Nissan mega-merger mooted

UPDATED: This article was updated on 31/12/2024

HONDA and Nissan have now signed a memorandum of understanding (MOU) to explore the possibility of Mitsubishi Motors’ participation, involvement, and synergy sharing in relation to the business integration through the establishment of a joint holding company outlined in an MOU signed between Nissan and Honda.

As detailed by GoAuto last week (further details in original article below), Honda, Nissan, and Mitsubishi Motors have reached a basic agreement to proceed with discussions based on the framework established in the MOU signed by Nissan and Honda on August 1 regarding the commencement of a strategic partnership focused on intelligence and electrification.

Mitsubishi Motors has been participating in this framework, and the three companies have been proceeding with discussions.

Following the agreement between Nissan and Honda to start consideration toward a business integration through the establishment of a joint holding company amid the dramatic changes in the environment surrounding both companies and the automotive industry, the three companies have agreed to explore the possibility of achieving synergies at an increased level through Mitsubishi Motors’ participation or involvement in the business integration.

Mitsubishi Motors aims to reach its conclusion by the end of January 2025 on the participation or involvement in the business integration between Nissan and Honda.

Marking the announcement, Nissan director, president, CEO and representative executive officer Makoto Uchida said, “Honda and Nissan have begun considering a business integration, and will study the creation of significant synergies between the two companies in a wide range of fields. It is significant that Nissan's partner, Mitsubishi Motors, is also involved in these discussions”.

“We anticipate that if this integration comes to fruition, we will be able to deliver even greater value to a wider customer base,” he concluded.

Honda director and representative executive officer Toshihiro Mibe said, “At this time of change in the automobile industry, which is said to occur once every 100 years, we hope that Mitsubishi Motors’ participation in the business integration discussions of Nissan and Honda will lead to further social change, and that we will be able to become a leading company in creating new value in mobility through business integration”.

“Nissan and Honda will start the discussion from today onwards with an aim to clarify the possibility of business integration by around the end of January in line with the consideration of Mitsubishi Motors,” he added.

Mitsubishi Motors director, representative executive officer, and president and CEO Takao Kato said, “In an era of change in the automotive industry, the study between Nissan and Honda about a business integration will accelerate synergy maximization effects, bringing high value also to the collaborative businesses with Mitsubishi Motors”.

“In order to realise synergies and to make the best use of each company's strengths, we will also study the best form of cooperation.”

The original article continues below:

MOUNTING competition from larger global electric vehicle manufacturers has prompted Japanese auto giants Honda and Nissan to begin merger negotiations, Japan’s Nikkei newspaper has reported.

The duo has increased ties in recent months in a bid to compete in a challenging and fast-changing EV landscape, facing heavy competition from America’s Tesla and a growing number of new energy entrants from China.

The Nikkei reports that slowing demand in Europe and the United States has further intensified pressure upon traditional automotive marques, with Honda and Nissan saying they are “exploring various possibilities for future collaboration, leveraging each other’s strengths”.

The move follows a decision by the two companies earlier this year to work together on electric vehicle batteries and software.

It is understood the two manufacturers will operate under a single holding under the proposed merger, but the stakes each would hold in the new entity, along with other details, are to be decided later.

Each company said they will inform stakeholders of any updates at “an appropriate time”.

Further, French automaker Renault, a major Nissan shareholder, said it had “no information” on the matter and declined to comment.

It is unknown whether Mitsubishi, the third partner in the Renault-Nissan-Mitsubishi alliance, will be affected by the planned mega-merger, which is tipped to become the biggest in the industry since the $52 billion ($A81.8b) Stellantis merger between Fiat Chrysler and PSA in 2021.

The proposed merger would also place Honda and Nissan in better stead to compete with Toyota (which has stakes in Mazda, Subaru and Suzuki) both domestically and abroad.

Honda, Nissan, and Mitsubishi sold a combined four million vehicles globally in first half of 2024, well short of the 5.2 million units sold by Toyota.

With Automotive News, Nikkei