STORY: A historic pivot for Japan’s auto industry is underway.
Honda and Nissan announced on Monday that they have started talks toward a potential merger.
The move underlines the threat Chinese EV makers now pose to some of the world’s carmaker heavyweights.
The integration would create the world’s third-largest auto group by vehicle sales after Toyota and Volkswagen.
And would also give Nissan and Honda a chance to share resources in the face of intense competition.
The companies also announced that smaller Mitsubishi, in which Nissan is top shareholder, was also considering joining.
The chief executives of all three held a press conference in Tokyo.
Honda CEO Toshihiro Mibe:
”There is a rise of Chinese power and emerging forces, and the structure of the automobile industry is changing. What this means is that, I believe that the value itself in terms of automobiles and mobility will change. Ultimately, we would like to lead the world once again, and you can think that today’s discussion is the first step in consideration towards that direction.”
Honda is Japan’s second-largest automaker and Nissan its number 3.
A deal would mark the biggest reshaping in the global auto industry since Fiat Chrysler and PSA merged in 2021 to create Stellantis.
The two companies said they’d aim to wrap up talks around June 2025 and then set up a holding company by August 2026.
Honda has a market capitalization of more than $40 billion, while Nissan is valued at about $10 billion.
Honda said it will appoint the majority of the holding company’s board.
In a separate online press conference with the Foreign Correspondents Club of Japan on Monday, former Nissan chairman Carlos Ghosn gave his reaction to the news.
He said he did not believe the Honda-Nissan alliance would be successful, and that the two automakers were not complementary.
Ghosn is wanted as a fugitive in Japan for jumping bail and fleeing to Lebanon.
His 2018 arrest for financial wrongdoing threw Nissan into crisis.
