WORLD
Honda, Nissan confirm merger talks to deal with surging competition
- IBJ Bureau
- Dec 24, 2024
Honda and Nissan are in talks to merge by 2026, they said on Monday. The merger is seen as a historic pivot for Japan’s auto industry that underlines the threat Chinese EV-makers now pose to the world’s long-dominant legacy carmakers.
The tie-up would create the world’s third-largest auto group by vehicle sales after Toyota and Volkswagen.
It would also give the two companies scale and a chance to share resources in the face of intense competition from Tesla and more nimble Chinese rivals, such as BYD.
The merger of Honda, Japan’s second-largest automaker, with Nissan, Japan’s third-largest car manufacturer, would be the biggest reshaping in the global auto industry since Fiat Chrysler Automobiles and PSA merged in 2021 to create Stellantis in a $52-billion deal.
Smaller Mitsubishi Motors, in which Nissan is top shareholder, is also considering joining and would make a decision by the end of January, the companies have said.
The chief executives of all the three car companies recently held a joint press conference in Tokyo.
“The rise of Chinese automakers and new players has changed the car industry quite a lot,” said Honda CEO Toshihiro Mibe has said, citing technological trends of electrification and autonomous driving. “We have to build up capabilities to fight with them by 2030, otherwise we will be beaten,” he adds.
The two companies aim for combined sales of 30 trillion yen ($191 billion) and operating profit of more than 3 trillion yen through the potential merger, they have added.
They aim to wrap up talks around June 2025 before setting up a holding company by August 2026, when shares of both the companies would be delisted.
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