Honda, Nissan eye merger by 2026 amid tough market challenges
Honda Motor Co. and Nissan Motor Co. are aiming to finalise a merger agreement by June, following negotiations set to begin later Monday, with the merger potentially taking place in 2026, according to Japanese media reports citing unnamed sources, Bloomberg reported.
The two automakers intend to establish a holding company, where Honda will select the president, as reported by Japanese broadcaster NHK.
A press briefing is expected Monday afternoon after the companies convene their respective board meetings.
The presidents of Honda, Nissan, and Mitsubishi Motor Corp. — Nissan’s junior partner — were seen entering and exiting Japan’s transportation ministry on Monday morning, presumably to inform officials of their plans to initiate formal merger discussions.
The executives declined to comment when approached, and representatives from Nissan and Honda also refused to provide any statements.
The Yomiuri newspaper reported separately that the merger target is 2026, with the holding company planned as the listed entity.
Shares in Nissan dropped by as much as 2.6 percent, extending the year’s decline to approximately 21 percent. In contrast, Honda shares rose by 2.1 percent but remain down 14.4 percent since January.
Both Honda and Nissan are grappling with significant challenges.
Nissan, in particular, is in a precarious financial position, as competition from a surge of electric and hybrid vehicles produced by Chinese rivals forces traditional automakers to collaborate.
The company is struggling with plummeting sales in the US and China, leading to job cuts, reduced production capacity, and a 70 percent reduction in its annual profit forecast.
The discussions faced earlier complications from Taiwanese manufacturer Hon Hai Precision Industry Co. (Foxconn), which had shown interest in acquiring Nissan.
However, Foxconn has reportedly paused its efforts to observe the progress of talks between Honda and Nissan, according to a source familiar with the matter.
If realised, a Honda-Nissan alliance, potentially involving Mitsubishi Motors, would effectively divide Japan’s automotive industry.
The trio would compete against Toyota Motor Corp. and its partnerships with Mazda Motor Corp., Subaru Corp., and Suzuki Motor Corp.
Earlier this year, Honda and Nissan had already initiated groundwork for collaboration, announcing plans with Mitsubishi Motors to jointly develop batteries, software, and other EV technologies.
Support Our Journalism
We cannot do without you.. your contribution supports unbiased journalism
IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.
