Honda-Nissan merger: Japanese auto giants announce world’s third largest carmaker group along with Mitsubishi

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  • Honda and Nissan plan to team up to jointly challenge world’s top electric vehicle manufacturers like Tesla, BYD.
Honda-Nissan merger
Honda Cars and Nissan Motor are among the top three carmakers from Japan which also operate in India. The carmakers has announced a merger for global markets.

Japanese auto giant Honda Cars and Nissan Motor will set up a holding company together in what is seen as the first step towards a merger between the two carmakers. The news comes in as the Japanese carmaker duo initiated talks today to discuss strategy to integrate their automotive businesses for global markets. The carmakers have announced signing of a basic agreement on the merger. The deal is likely to be finalised by June next year. Honda and Nissan, Japan’s second and third largest carmakers by volume, will also be joined Mitsubishi Motors which has been part of the Renault-Nissan alliance so far.

The two carmakers are busy finalising the deal between them. The carmakers will set up a new holding company by August 2026. Honda Cars will keep majority of the control of the new holding company with key posts like that of the president. Once the Honda-Nissan merger is finalised and operational, it will become the third largest in the world in terms of sales volume.

The two carmakers have been considering a merger or the formation of a holding company at a time when Nissan is in dire need of a financial turnaround. Falling sales and profits in the United States and China have forced the company to cut jobs, reduce production capacity and cut its annual profit outlook by 70 percent. Makoto Uchida, CEO at Nissan Motor, had even said he is ready to forfeit half his salary to help the carmaker stay afloat. By joining hands, Nissan will be able to share costs and reduce production expenses. “We anticipate that if this integration comes to fruition, we will be able to deliver even greater value to a wider customer base,” Uchida said in a statement.

Also Read : What the Honda-Nissan merger could mean for the global carmakers and the industry

Earlier in March this year, Honda and Nissan had agreed to launch a feasibility study on a strategic EV production partnership, including related software technology development, to reduce costs and increase competitiveness. The tie-up not only aims to take on bigger carmakers like Toyota, but also some of the EV giants like Tesla and Chinese electric vehicle makers like BYD.

Honda-Nissan merger: What it could mean for India

The exact nature of the strategic alliance between Honda and Nissan is expected to be clear in coming days. It will have its impact in India as well where both the Japanese auto giants exist in the mass market segment. While Honda sells cars like the Amaze and City sedans besides the Elevate SUV, Nissan Motor has only Magnite as the only made-in-India SUV in its portfolio. The carmaker launched the X-Trail SUV earlier this year which is brought through the import route.

Honda and Nissan are expected to collaborate in electric vehicle production globally. Both carmakers have revealed their plans to enter the EV segment in India. Honda had earlier announced that it will drive in the fully-electric version of the Elevate SUV. Nissan too plans to introduce the Ariya electric SUV some time next year. It remains to be seen if the carmakers will collaborate on all upcoming EVs for India.

Get insights into Upcoming Cars In India, Electric Vehicles, Upcoming Bikes in India and cutting-edge technology transforming the automotive landscape.

First Published Date: 23 Dec 2024, 13:45 PM IST

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