Honda and Nissan to Merge

In a major shakeup of the automotive industry, Japanese giants Honda and Nissan have announced plans to merge.

​The move aims to bolster their competitiveness in the rapidly evolving electric vehicle market, where they face increasing pressure from rivals like Tesla and China's BYD.
The two companies confirmed on Monday they've signed a memorandum of understanding to create what would become the world's third-largest car manufacturer by sales, trailing only Toyota and Volkswagen.
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Mitsubishi Could Join Forces
The potential merger could become even larger. Nissan's alliance partner, Mitsubishi Motors, is also in talks to join the integration. A final decision on Mitsubishi's involvement is expected by the end of January. If all three companies merge, the resulting entity could be worth over $50 billion.

Honda to Lead Initially
According to Honda president Toshihiro Mibe, Honda will initially lead the management of the merged company. The goal is to finalize a formal merger agreement by June and complete the deal by August 2026. Mibe stated that combining the resources, expertise, and technologies of Honda and Nissan is crucial to navigate the challenging changes facing the automotive industry.

A Move for Survival?
The proposed merger, initially hinted at last week, aims to establish a joint holding company to better compete in the global EV market. This deal could be particularly significant for Nissan, which has been struggling financially. The company saw a dramatic decline in net earnings earlier this year and recently announced plans for significant layoffs.
Nissan CEO Makoto Uchida expressed optimism about the merger's potential, stating that uniting the strengths of both companies could deliver unparalleled value to customers.
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Skepticism from Former Nissan Boss
However, not everyone is convinced. Former Nissan boss Carlos Ghosn, who was arrested in 2018 on charges of financial misconduct, described the merger as a "desperate move" by Nissan. He expressed doubt about the potential for meaningful synergies between the two companies.
This proposed merger represents a significant shift in the automotive landscape and its success or failure will have major implications for the future of the industry.

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Image source: https://www.honda.com.au, https://www.nissan.com.au/vehicles/browse-range/juke.html