Nissan and Honda officially announced merger plans

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Nissan and Honda officially announced merger plans

Honda and Nissan have officially confirmed rumors that they are in merger talks, according to a joint press release. Each of them will continue to operate under its own brand, but with a new joint holding company as the parent. If Nissan-controlled Mitsubishi joins, the combined group will be the third largest automaker in the world by sales and will have a net worth of up to USD 50 billion.

“Today marks a crucial moment as we begin negotiations on a business integration that could shape our future,” said Nissan CEO Makoto Uchida.

The integration talks are still preliminary, but the companies are moving forward. “We are still in the early stages of our review and have not yet made a decision on business integration,” said Honda CEO Toshihiro Mibe. However, he added that the companies aim to “find a direction for the possibility of business integration by the end of January 2025.” After that, they hope to have a “definitive agreement” to integrate the businesses by June 2025. Approval must come from the shareholders of each company and will depend on whether Nissan restructures.

Nissan and Honda have previously announced plans to work together on electric vehicle components and software development, but the joint company will be much more integrated. According to the press release, the plan includes: standardization of vehicle platforms; merging research and development teams; optimization of production systems and facilities. All of this is generally aimed at cutting costs, so it could lead to significant layoffs in Japan and other countries.

Although both companies sell similar vehicles, such as the Nissan Rogue and Honda CR-V, some synergies seem possible. Nissan sells large pickup trucks and SUVs in the U.S., which Honda does not offer, and has more experience in electric and plug-in vehicles. On the other hand, Honda has relatively stable financial performance, while Nissan is struggling in the market, especially at home.

Of course, Nissan is already part of the Renault-Nissan-Misubishi alliance. Nissan and Renault each own a 15 percent stake in the other, and all three companies sold 10.6 million vehicles together worldwide in 2017 – more than any other passenger car manufacturer at the time. The alliance is also one of the largest producers of electric vehicles in the world, having sold more than 1 million units since 2009. If Nissan and Honda merge, it is unclear what will happen to the Alliance.

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