Nissan and Honda confirm merger talks to create world's third largest car maker

Nissan has unveiled plans to work towards a merger with fellow Japanese auto heavyweight, Honda.

The two firms have penned a memorandum of understanding (MOU) aimed at uniting under a joint holding company, setting the stage for what could become the world's third-largest car maker, with a value exceeding $50bn (approximately £40bn).

The Sunderland-based Nissan workforce, around 6,000 strong, alongside many more jobs in the North East through its supply chain, may be looking to a future shaped by this merger. Since March, Nissan and Honda have collaborated on electric vehicle technology, but now are negotiating a full-blown merger as Nissan grapples with sales declines and a signal of 9,000 job cuts globally.

The automakers said the potential deal "is aimed to serve as an option to maintain global competitiveness" and for the two companies to continue to deliver "more attractive products and services to customers worldwide". Makoto Uchida, Nissan's President and CEO, said: "Today marks a pivotal moment as we begin discussions on business integration that has the potential to shape our future. If realized, I believe that by uniting the strengths of both companies, we can deliver unparalleled value to customers worldwide who appreciate our respective brands."

He further commented, "Together, we can create a unique way for them to enjoy cars that neither company could achieve alone.", reports Business Live.

Honda executive officer Toshihiro Mibe emphasized the importance of combining forces, stating: "Creation of new mobility value by bringing together the resources including knowledge, talents, and technologies that Honda and Nissan have been developing over the long years is essential to overcome challenging environmental shifts that the auto industry is facing. Honda and Nissan are two companies with distinctive strengths."

The companies outlined the potential merger's considerable advantages, focusing on the potential to standardise vehicle platforms and pool expertise concerning research and development efforts. They also touched upon the expected savings, indicating these would arise from "the integration of systems and back-office operations", clarifying that there would be no impact on manufacturing sites.

These updates come against a backdrop of widespread turmoil within the car industry; this isn't isolated to Nissan alone. Ford reveals plans to cut 4,000 roles across Europe, and Stellantis announces the impending closure of its Vauxhall factory in Luton, jeopardising 1,100 jobs.

Meanwhile, car manufacturers have expressed their discontent towards the UK's zero emissions vehicle mandate, prompting a responsive assessment from the incoming Government.