Honda and Nissan plan merger and invited Mitsubishi to future holding

Japanese automakers Honda and Nissan have signed a memorandum of understanding that could lead to the creation of a new holding company – the third largest in the world after Toyota and Volkswagen.

Negotiations between the companies are scheduled to be completed by June 2025, and the formation of the holding company – by August 2026. Mitsubishi Motors, a partner of Nissan since 2016, is also considering the possibility of joining, a decision on this is expected in January 2025.

The estimated market capitalization of the combined corporation will be $54 billion, and including Mitsubishi – $58 billion, which is significantly lower than Toyota’s $287 billion. Nevertheless, in terms of sales – more than 8 million cars per year – the new alliance will become the third largest automaker in the world. For comparison, Toyota sold 11.2 million cars in 2023, and Volkswagen – 9.24 million.

The merger could be particularly helpful for Nissan, which has been struggling with falling sales in China and the US and has also announced 9,000 job cuts and a 20% reduction in production capacity.

The companies intend to focus on joint investments in the development of electric vehicles and autonomous driving technologies to strengthen their position in the fight against Chinese competitors.