Japanese automakers Honda and Nissan are negotiating a merger to better compete with electric vehicle manufacturers such as Tesla, BYD and others. According to Nikkei Asia, they have discussed signing a memorandum of understanding that outlines plans for capital allocation in a new holding company from which both companies will conduct business, according to anonymous sources.
Both Honda and Nissan are also discussing a plan to bring in Mitsubishi, which would be similar to the merger of various Japanese electronics brands such as Konica Minolta, JVCKenwood and others. Honda and Nissan are already working together to develop technology and software for electric vehicles and have invited Mitsubishi to join the party.
Of the two companies, it is Nissan that is really in trouble and will reportedly last another year unless another company (Honda) steps in and buys Nissan shares. According to Reuters, Nissan’s net profit in mid-2024 was down more than 90% from the previous year, and the company was forced to cut its full-year operating profit forecast by almost 70%. Nissan and Honda weakened their statements to Reuters:
“As announced in March of this year, Honda and Nissan are exploring various opportunities for future cooperation, capitalizing on each other’s strengths.”
Growth in the electric vehicle market has slowed globally, but Chinese brands are outpacing American, European and Japanese manufacturers. According to Bloomberg, Japanese automakers are losing a large share of the market in East and Southeast Asia, from China to Indonesia.
Honda is preparing to launch its new Honda Zero EV platform next year and has had some success in the US with its GM-based Prologue electric SUV. Meanwhile, Nissan has lost its first lead since the 2011 Leaf and has launched only one electric vehicle, the Ariya.
Both companies, along with domestic rival Toyota, have added more hybrid models to their roadmaps than full electric vehicles. This year, Nissan said it will have 16 “electrified” models by 2026, and Honda plans to launch a really cool hybrid sports coupe, the Prelude, next year.
