Honda and Nissan Eye Joint Holding Company and Possible Merger

Carmakers Honda and Nissan might be joining forces to stay ahead of the competition. Reportedly, the two Japanese companies are forming a holding company, according to Nikkei Asia, which would let them share resources and technology.

Plans for a new umbrella company have not been confirmed, but some sources familiar with the discussions believe it may lead to a merger between Honda and Nissan. In a statement on Tuesday, Honda noted a previously discussed alliance but did not confirm any merger rumors.

“As announced in March of this year, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other’s strengths,” said a Honda spokesperson, per Business Insider. “We will inform our stakeholders of any updates at an appropriate time.” 

Mitsubishi Motors, Nissan’s largest shareholder, would likely also be involved in any collaboration efforts between the two auto giants. Mitsubishi has declined to comment on any merger talks, only saying there has been no decision as of yet.

A Honda and Nissan Merger Could Make Sense

Fierce competition from China has likely prompted Honda and Nissan to discuss the holding company or a potential merger. Chinese EV maker BYD has been gaining traction in the Asian market, making it difficult for the two Japanese automakers to retain market share and remain profitable. With low prices combined with advanced technology, BYD has become one of the largest automakers in China, even surpassing Tesla’s EV sales revenue in the 2024 third quarter.

In November, Nissan reported poor financial results for the first half of fiscal year 2024. To combat slowing sales and declining profit, Nissan announced a plan to aggressively reduce costs, which included cutting 9,000 jobs.

In the first half of this year, sales of Honda vehicles fell 21.5% in China. As a result, the company temporarily stopped production at three China plants to reduce inventory. Reportedly, Honda also cut jobs alongside the manufacturing pause.

To gain a competitive advantage again, Nissan and Honda joining forces would certainly help advance EV technology. Thus far, each company has lacked momentum in developing an inexpensive yet high-tech lineup of electric cars.

“There are limits if we are to do that alone. So, that had triggered us to engage in partnership with Honda,” said Nissan CEO Makoto Uchida, referring to the March agreement to work on EV batteries and software.