TOKYO, Dec 23 (Reuters) – Honda Motor Co. (7267.T) and Nissan Motor Co. (7201.T) are reportedly set to announce a plan on Monday to explore a merger through the establishment of a joint holding company, sources familiar with the matter revealed. The ambitious move aims to finalize the deal by June 2025 and potentially reshape the global automotive landscape.
The proposed consolidation would create the world’s third-largest automaker by vehicle sales, following Toyota Motor Corp. (7203.T) and Volkswagen Group (VOWG_p.DE). Together, Honda and Nissan would combine resources to better compete against rising industry challengers like Tesla Inc. (TSLA.O) and Chinese automakers such as BYD Co. (002594.SZ).
Honda, Japan's second-largest automaker with a market capitalization exceeding $40 billion, and Nissan, valued at approximately $10 billion, are set to form a holding company that will be publicly listed in August 2026. Following this, both companies would delist individually. Honda will hold a controlling majority in the new entity, including leadership appointments, sources said.
The two companies have been strengthening ties over the past year. In March, they announced plans for joint research in electrification and software development. By August, the partnership expanded to include Mitsubishi Motors Corp. (7267.T), with a focus on creating synergies across the three brands.
The anticipated integration of Mitsubishi Motors into the new holding company could elevate the group's global sales to over 8 million vehicles annually, surpassing Hyundai Motor Co. (005380.KS) and Kia Corp. (000270.KS) as the third-largest automotive group.
A joint press conference is expected on Monday after board meetings, with Mitsubishi Motors also participating, according to sources. However, details remain confidential as the announcement has yet to be made public.
This merger would mark the most significant restructuring in the global automotive sector since the $52 billion merger of Fiat Chrysler Automobiles and PSA Group to form Stellantis (STLAM.MI) in 2021. The combined Honda-Nissan entity aims to streamline operations and respond to growing challenges in the global market, including declining sales in China and the United States.
Both companies have recently faced setbacks in the competitive Chinese market, losing ground to innovative local players such as BYD. Nissan, for its part, announced plans last month to cut 9,000 jobs and reduce global production capacity by 20%. Honda also reported disappointing earnings, partly due to underperformance in China.
Renault SA (RENA.PA), Nissan's largest shareholder, has indicated openness to the potential merger, though it plans to closely evaluate the implications. Separately, Taiwan's Foxconn Technology Group (2317.TW) had expressed interest in a bid for Nissan but paused its approach after discussions with Renault, according to Bloomberg News.
The consolidation of Honda and Nissan could significantly alter the competitive dynamics of the automotive sector, offering the combined entity a stronger footing to navigate the ongoing industry transformation toward electrification and advanced software integration.
.png)
The opinions posted here do not belong to 🔰www.indiansdaily.com. The author is solely responsible for the opinions.
As per the IT policy of the Central Government, insults against an individual, community, religion or country, defamatory and inflammatory remarks, obscene and vulgar language are punishable offenses. Legal action will be taken for such expressions of opinion.