Nissan and Honda officially announce their plans to merge

Honda and Nissan have officially confirmed Rumors The companies wrote in a letter that they were seeking a merger Joint press release. Each will continue to operate under its own brand, but with a new joint holding company as the parent company. If Mitsubishi, which is also controlled by Nissan, joins, the combined group will become the world’s third-largest automaker by sales volume and have a net worth of up to $50 billion.

“Today marks a pivotal moment as we begin discussions about business integrations that have the potential to shape our future,” said Makoto Uchida, Nissan CEO.

Integration talks are still preliminary, but the companies are moving forward. “We are still in the review initiation phase and have not yet decided on the business integration,” Honda Director Toshihiro Mebe said. But he added that the two companies aim to “find a direction for possible business integration by the end of January 2025.” Then, they hope to reach a “final agreement” on business integration by June 2025. Approval must come from shareholders in each company and is subject to Nissan implementing a turnaround.

Nissan and Honda previously Announced plans to work together on electric vehicle components and software development, but the combined company will be much more integrated. According to the press release, the plan includes: standardization of vehicle platforms; Consolidate R&D teams; Improving manufacturing systems and facilities. All of this is usually aimed at cutting costs, and thus may lead to large layoffs in Japan and elsewhere.

Although the two companies sell similar cars like the Nissan Rogue and Honda CR-V, some synergy seems possible. Nissan sells pickup trucks and large SUVs in the U.S. that Honda doesn’t, and it has more experience with EVs and electric vehicles. On the other hand, Honda has a relatively stable financial situation while Nissan is struggling in the market, especially at home.

Of course, Nissan is already in the Renault-Nissan-Misubishi alliance. Nissan and Renault have a 15% voting stake in the other company, and the three companies together sold 10.6 million vehicles worldwide in 2017, more than any other light vehicle manufacturer at the time. The alliance is also one of the world’s largest electric vehicle makers, with more than 1 million units sold since 2009. If Nissan and Honda merge, it’s not clear what would happen to the alliance.