Honda, Nissan Announce Start of Discussions on Integration; Inclusion of Mitsubishi Remains under Consideration

The Yomiuri Shimbun

19:26 JST, December 23, 2024

Honda Motor Co. and Nissan Motor Co. officially announced at a joint press conference on Monday that they had started talks on integrating their businesses in August 2026.

They aim to establish a new holding company and bring the two companies under its umbrella. Honda will appoint the president and the majority of the board members of the new company. A final agreement is expected to be signed in June.

The automakers are considering including Mitsubishi Motors Corp., of which Nissan is the top shareholder, in the integration.

The presidents of Honda, Nissan and Mitsubishi Motors attended the joint press conference in Tokyo. “We have confirmed again that our business integration will bring about synergy in all areas and that the impact of this will be greater than expected,” Honda President Toshihiro Mibe said. He also stated that “we aim to set a direction by the end of January.”

If realized, the Honda-Nissan integration would create the world’s third largest automobile group — after the Toyota Group and Germany’s Volkswagen Group — based on a global sales volume in 2023 of 8 million vehicles. The combined value of sales by Honda and Nissan was around ¥30 trillion.

Honda and Nissan will work on the standardization of parts and advance support for each other in the development of hybrid and electric vehicles. The integration would greatly benefit Nissan, as it has not been able to launch EVs in North America, one of the reasons behind its poor business performance.

The automakers plan to accelerate the streamlining of development and production costs by merging their research and development functions and reorganizing their production bases. Honda and Nissan will share the huge investment costs for the integration.

Honda and Nissan announced in March that they had officially started considering forging a strategic partnership in the development of EVs and then announced its details in August, including the standardization of software that controls vehicles’ onboard computers and the participation of Mitsubishi Motors in the framework.

Behind the move to integrate their management is the rapid rise of U.S. and Chinese rivals.

The presence of Taiwan’s Hon Hai Precision Industry Co., also known as Foxconn, is another factor that prompted the talks. Hon Hai was looking to acquire Nissan, after a rapid downturn in performance led to a fall in the automaker’s share price and an announcement of a cut of 9,000 jobs as an emergency measure. Such moves by overseas rivals have apparently accelerated the negotiations.