Honda, Nissan Announce Historic Merger To Compete in Evolving Auto Market
Honda and Nissan confirmed on Dec. 23 plans to merge by 2026, marking a pivotal moment for Japan’s auto industry and a significant realignment of the global automotive landscape. The merger, which may include smaller automaker Mitsubishi Motors, would form the world’s third-largest auto group by vehicle sales, behind only Toyota and Volkswagen.
The companies announced their decision following growing pressure from Chinese electric vehicle (EV) manufacturers and innovative rivals like Tesla. Honda CEO Toshihiro Mibe underscored the urgency of the partnership, citing the rapid pace of industry transformation driven by electrification and autonomous driving technologies.
“The rise of Chinese automakers and new players has changed the car industry quite a lot,” Mibe said during a joint press conference in Tokyo. “We have to build up capabilities to fight with them by 2030, otherwise we’ll be beaten.”
Under the proposed merger, the three automakers aim to generate combined sales of 30 trillion yen ($191 billion) and an operating profit exceeding 3 trillion yen. The executives plan to finalize merger discussions around June 2025 and establish a single holding company by August 2026. Honda, with a market capitalization exceeding $40 billion ? approximately four times that of Nissan ? would hold most of the board seats. The newly formed entity, including Mitsubishi Motors, would sell more than 8 million vehicles globally, surpassing South Korea’s Hyundai and Kia to claim the number three spot in global sales. Mitsubishi will decide by the end of January whether to join the partnership.
Reports of a potential merger surfaced after Nissan announced efforts to cut costs by merging some Infiniti dealerships with nearby Nissan stores. The automaker had also previously outlined plans to reduce its workforce and restructure operations, while CEO Makoto Uchida took a 50 percent pay cut.
Industry experts likened the deal to the 2021 merger between Fiat Chrysler Automobiles and PSA Group, which created Stellantis in a $52 billion transaction. If finalized, the Honda-Nissan merger would become one of the largest restructuring moves in automotive history. Executives from all three companies emphasized that the alliance would enhance their ability to share resources and navigate the increasingly competitive EV market. The completion of the merger would delist shares of both Honda and Nissan.
Luis Apolo Staff Reporter teen/1737072799/1613367592
1. What significant event did Honda and Nissan announce on December 23, and when is it expected to be finalized?
2. Which smaller automaker might join the merger, and what rank would the new entity hold globally by vehicle sales?
3. How much combined sales and operating profit do the companies aim to achieve under the merger?
4. What operational changes had Nissan made before the merger discussions began?
1. What do you think about the trend of automakers merging to stay competitive? Have you seen examples in other industries?
2. How do you feel about the rise of electric vehicle (EV) manufacturers like Tesla? Would you consider buying an EV? Why or why not?
3. Have you ever witnessed or experienced significant changes in an industry you are familiar with? How did the companies adapt?
4. If you were an executive at an automaker, what strategies would you suggest to stay competitive in the EV market?
Honda and Nissan confirmed on Dec. 23 plans to merge by 2026, marking a pivotal moment for Japan’s auto industry and a significant realignment of the global automotive landscape. The merger, which may include smaller automaker Mitsubishi Motors, would form the world’s third-largest auto group by vehicle sales, behind only Toyota and Volkswagen.
