Recent reports suggest that Honda and Nissan are in talks to merge by 2026. This would create the third-largest automaker in the world. While the merger is still in its early stages, it has the potential to reshape the global automotive landscape.
Honda and Nissan, two of Japan’s biggest carmakers, have announced plans to merge by 2026. The merger aims to create the world’s third-largest car group, trailing only Toyota and Volkswagen. The two companies hope to combine resources to better compete with electric vehicle (EV) leaders like Tesla and Chinese automakers such as BYD.
At a press conference in Tokyo, Honda CEO Toshihiro Mibe and Nissan CEO Makoto Uchida explained that the partnership is essential to address rising challenges in the EV market. “The rise of Chinese automakers and new technologies like electrification and autonomous driving has changed the car industry. We need to adapt or risk falling behind,” Mibe said.
Under the merger plan, a holding company will be established in August 2026. Honda appoints the majority of the board members. The companies aim for combined sales of 30 trillion yen (about $191 billion) and an operating profit of over 3 trillion yen. By merging, they hope to sell over 8 million cars annually. These numbers would solidify their position among the top global automakers.
Smaller Japanese automaker Mitsubishi Motors, in which Nissan holds a significant stake, is also considering joining the merger. Mitsubishi plans to make its decision by the end of January 2025. If it joins, the combined group would further strengthen its global presence.
Both Honda and Nissan have been struggling in key markets like China, where competition from local EV makers has intensified. Nissan recently announced job cuts and production reductions, while Honda has faced lower-than-expected earnings due to declining sales in China. Despite these challenges, Mibe clarified, “This is not a rescue of Nissan. Their turnaround is a prerequisite for this merger.”
The merger discussions began earlier this year, with both companies already working on joint projects related to EV technology and software. If successful, this would mark the biggest shake-up in the car industry since Fiat Chrysler and PSA merged in 2021 to form Stellantis.
As of now, Renault, Nissan’s largest shareholder, has expressed willingness to explore the merger. Meanwhile, Taiwanese company Foxconn had previously shown interest in acquiring Nissan but paused its plans after the Honda-Nissan talks gained traction.
