CNBC: Japan’s Honda Motor and Nissan Motor to reportedly begin merger talks to boost competitive edge

Japanese automakers Nissan Motor and Honda Motor reportedly plan to enter into negotiations for a merger to better compete in the rapidly changing global automotive industry, the Nikkei newspaper reported Tuesday.

Honda and Nissan are considering operating under a holding company, and soon will sign a memorandum of understanding, according to the report.

They also look to eventually bring Mitsubishi Motors, in which Nissan is the top shareholder with a 24 per cent stake, under the holding company.

The combined Nissan-Honda-Mitsubishi enterprise would equate to more than 8 million vehicle sales annually, according to Nikkei. That would place the company among the world’s largest automakers, but still below fellow Japanese automaker Toyota Motor, at 11.2 million in 2023, as well as German automaker Volkswagen, which last year reported sales of 9.2 million vehicles.

In similar statements, Honda and Nissan neither confirmed nor denied the report.

“The reported content was not released by our company,” Honda said.

“As announced in March of this year, Honda and Nissan are exploring various possibilities for future collaboration, leveraging each other’s strengths. We will inform our stakeholders of any updates at an appropriate time.”

The merger report follows the two Japanese automakers entering into a strategic partnership earlier this year on shared automotive components and software.

Such a tie-up would be the largest automotive industry merger since Fiat Chrysler joined with France-based PSA Groupe to form Stellantis in January 2021.

Automotive consultants and other experts have recently been calling for an increase in mergers and acquisitions to share costs and better compete against rapidly expanding Chinese automakers as well as U.S. all-electric vehicle leader Tesla.

U.S.-traded shares of Honda closed up about 1 per cent on Tuesday. Over-the-counter shares of Nissan, which is in the middle of a restructuring, jumped more than 11 per cent.