Honda, Nissan announce merger, set to form world's third-largest carmaker

The integration of Honda and Nissan will create the third-largest carmaker in the world in terms of volume.

Honda Motor Company and Nissan Motor Company today announced the signing of a memorandum of understanding (MoU) to start merger discussions through the establishment of a joint holding company. The coming together of the two Japanese auto majors is aimed at maintaining global competitiveness with better products and services.

If the merger goes through, the joint holding company will reportedly become the third-largest automaker in the world in terms of volume.

Mitsubishi Motors Corporation might join the Honda-Nissan alliance as a separate MoU was signed between the three companies. It will reach the final decision regarding its participation by the end of January 2025.

In March 2024, Honda and Nissan joined hands to form a strategic partnership for vehicle intelligence and electrification. Both companies had also agreed at joint research in areas of platforms for next-gen software-defined vehicles.

Honda and Nissan will establish an integration preparatory committee to facilitate the merger. Following the merger, the combined sales revenue is expected to be over Rs 16,30,580 crore, with the operating profit being more than Rs 1,63,082 crore.

The two Japanese auto majors are aiming to collaborate in the following areas through the merger.

• Standardisation of vehicle platforms
• Enhancement of development capabilities and cost synergies through the integration of R&D functions
• Optimising manufacturing systems and facilities
• Strengthening competitive advantages across the supply chain through the integration of purchasing functions
• Realising cost synergies through operational efficiency improvements
• Acquisition of scale advantages through integration in sales finance functions
• Establishment of a talent foundation for intelligence and electrification

Honda and Nissan will establish a joint holding company through a joint share transfer. It will be the parent company of both Honda and Nissan. However, this will be subject to approval at each company's general meeting of shareholders and obtaining necessary approvals from relevant authorities.

Both Nissan and Honda will be wholly-owned subsidiaries of the joint holding company. Additionally, the companies plan to continue co-existing and developing the brands held by Honda and Nissan equally.

Shares of the newly established joint holding company under consideration are planned to be listed on the Tokyo Stock Exchange (TSE). The listing is scheduled for August 2026. Following this, both Nissan and Honda will be delisted.

Tentative schedule for business integration

At the time of the effective date of the share transfer, Honda will nominate a majority of each of the internal and external directors of the joint holding company. The President and representative director or president and representative executive officer of the joint holding company will be selected from among the directors nominated by Honda.

Japan's Toyota Motor Corporation and Suzuki Motor Corporation already have an alliance under which they collaborate in diverse areas, including the production and mutual supply of vehicles, and the sharing of electrified vehicles.