Honda and Nissan are exploring deeper collaboration, including a potential merger, to address growing competition from Tesla and Chinese EV makers. The move could create the world's third-largest automaker, reshaping Japan's automotive industry.
Honda and Nissan are in discussions to strengthen ties, potentially through a merger, two sources revealed on Wednesday. This move highlights how Japan's auto industry is responding to challenges from Tesla and Chinese competitors.
A merged Honda-Nissan entity would become the world's third-largest automaker, with a market value of $54 billion and annual production of 7.4 million vehicles, trailing only Toyota and Volkswagen.
The two companies established a strategic partnership in March to collaborate on electric vehicle (EV) development. However, Nissan's mounting financial troubles have accelerated the need for closer cooperation.
Last month, Nissan announced a $2.6 billion cost-saving plan, including 9,000 job cuts and a 20% reduction in production capacity, following an 85% drop in second-quarter profits due to weak sales in China and the US.
“This seems like an effort to rescue Nissan, but Honda is also facing challenges,” said Sanshiro Fukao of the Itochu Research Institute. Honda expects weaker cash flow next year and struggles in its EV segment.
Nissan shares surged over 22% on Wednesday, while Honda shares dipped 2.3%.
Mitsubishi shares rose 13%. The talks aim to enhance technological collaboration and could lead to a holding company or even a full merger, sources said. Cooperation with Mitsubishi Motors, in which Nissan owns a 24% stake, is also being explored.
Neither company has announced a deal, though they have acknowledged exploring collaboration opportunities.
“A Honda-Nissan merger could revitalise Japan's auto industry by providing competition to Toyota,” said Seiji Sugiura of Tokai Tokyo Intelligence Laboratory. However, integrating their differing corporate cultures and navigating US trade policies could pose challenges.
Nissan Motor Co. (7201.T) and Honda Motor Co. (7267.T) have formally ended discussions on a potential merger, a deal that would have created a $60 billion automotive giant. Despite this decision, both automakers confirmed they will continue to collaborate on electric vehicle (EV) technology.
Honda and Nissan plan to merge, forming the world’s third-largest automaker, as Japan’s car giants accelerate efforts to lead the shift to electric and autonomous vehicles.
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President Donald Trump has named newly confirmed FBI Director Kash Patel as the acting head of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF). The move consolidates Patel’s leadership over two major law enforcement agencies during a period of transition.
The Trump administration has ordered U.S. federal employees to submit a list of their work accomplishments by Monday night or risk losing their jobs, raising legal and procedural questions over mass firings.
Israel has delayed the release of hundreds of Palestinian prisoners until Hamas meets its conditions, highlighting tensions over the fragile Gaza ceasefire.
French President Emmanuel Macron and British Prime Minister Keir Starmer will travel to Washington next week amid European concerns over Donald Trump’s approach to Ukraine and his outreach to Moscow.
Donald Trump and Justin Trudeau discussed the Ukraine war and efforts to combat the illegal fentanyl trade in a call on Saturday, ahead of a planned leaders' discussion on the conflict.
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