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    Honda And Nissan To Join Forces In A Merger To Combat Competition In Electric Vehicle Market

    Image Source: CHALERMPHON SRISANG / Shutterstock

    On Monday, Honda and Nissan announced that they are engaged in merger discussions, confirmed by a signed agreement outlining timelines and plans.

    According to the Japanese news outlet Nikkei, the merger aims to combat competition in the electric vehicle market.

    The signed memorandum of understanding details a strategy where the two automakers would delist from the Tokyo Stock Exchange by July or August of 2026. Subsequently, shares of both companies would be included in a joint holding company.

    In 2023, the combined sales of the automakers surpassed 8 million vehicles. Such a number would position the merged entity as the third-largest automaker by sales volume, following Toyota and Volkswagen Group, which recorded sales of 11.2 million and 9.2 million vehicles, respectively, that year.

    2024 Mitsubishi Outlander

    The two automakers are already closely affiliated. Honda and Nissan have been working together on electric vehicle and software advancements since March, with Mitsubishi joining the collaboration in August. Nissan holds a 34% stake in Mitsubishi, and the two also share vehicle platforms and technologies through their existing alliance, which includes Renault. There have also been previous collaborations between Mitsubishi and Honda, most notably in the battery leasing sector for EVs via a joint venture called Altna.

    Japanese car manufacturers are consolidating to lower costs and to improve their standings in the electric vehicle race, following years of advocating for hydrogen fuel cells as a viable alternative. In May, Toyota, Mazda, and Subaru announced plans to work together on internal-combustion engine technologies.

    These moves are designed to counteract competition from global players, particularly from China, which last year surpassed Japan to become the largest vehicle exporter in the world.

    Nissan, in particular, is facing significant challenges. The automaker revealed plans in October to reduce its workforce by approximately 9,000 employees, which accounts for 6.7% of its global staff, along with a 20% cut in production capacity due to declining sales, especially in the U.S. and China. The Financial Times reported in November that insiders have cautioned that Nissan may only have about 12–14 months to survive, positioning this merger as a potential solution to the company’s financial struggles.

    Honda and Nissan emphasized that the merger’s scope would extend beyond software and powertrains. The combined entity would benefit from manufacturing scalability and optimization opportunities, alongside increased purchasing power. They also indicated that vehicle platform standardization would be assessed, though specific details were not disclosed.

    Image Source: CHALERMPHON SRISANG / Shutterstock

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