A new Japanese automotive giant is becoming increasingly likely

Honda/Nissan A new Japanese automotive giant is becoming increasingly likely

2025-01-10 Source: dpa 2 min Reading Time

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In Japan, the merger of Honda and Nissan is becoming quite likely quickly. Both companies officially announced the start of merger talks. Mitsubishi is still considering joining.

A merger is becoming increasingly likely (from left): Makoto Uchida, CEO of Nissan, and Toshihiro Mibe, CEO of Honda.(Image: Nissan) — A merger is becoming increasingly likely (from left): Makoto Uchida, CEO of Nissan, and Toshihiro Mibe, CEO of Honda.
(Image: Nissan)

The Japanese car manufacturers Honda and Nissan are specifically discussing a merger in light of the tough competition in electric vehicles and want to involve Mitsubishi Motors. The three companies already announced an agreement to begin the talks at a press conference before Christmas.

Honda and Nissan, Japan's second and third largest automakers, aim to conclude negotiations by June 2025. Nissan's partner Mitsubishi Motors plans to decide by the end of January whether the company will participate in a merger, the companies announced.

Honda and Nissan are considering a holding company for this by August 2026. Together, with sales of more than eight million vehicles, they would form the world's third-largest automotive group, coming close to Toyota and Volkswagen. They aim to combine their resources to better compete with Tesla and Chinese electric vehicle manufacturers.

Japanese car manufacturers have fallen behind globally in this area. Tesla and the Chinese manufacturer BYD are putting pressure on the Japanese in the USA and China. Nissan is particularly struggling in the Chinese market, where sales have significantly declined.

Cooperation already known since March

Nissan and Honda had already announced in March that they would cooperate in the development of electric vehicles and software technologies to reduce their costs and improve their competitiveness. Mitsubishi Motors joined these talks in August.

"Honda and Nissan have begun to consider a business integration and will examine creating significant synergies between the two companies in a variety of areas," said Nissan CEO Makoto Uchida.

Nissan under pressure—corporate restructuring initiated

Nissan is under economic pressure. In November, the company announced it would cut approximately 9,000 jobs worldwide. It plans to reduce global production capacities by 20 percent and reorganize its management, it was stated.

In addition, the company, which employs around 134,000 people, lowered its forecast for the second time this year. The target operating profit for the current fiscal year was revised downwards from 500 billion yen to 150 billion yen (approximately 932.421.500 USD).

Nissan is not the only car manufacturer in crisis. In recent months, several manufacturers and suppliers have announced large-scale job cuts, such as VW, Bosch, and Schaeffler. Mercedes-Benz has also announced cost-cutting measures. Volkswagen is also struggling with tough competition in the Chinese market: the carmaker wants to cut more than 35,000 jobs in a socially responsible manner by 2030. Entire factory closures, however, will not take place for the time being, contrary to fears.

CEO Ola Källenius wants to implement a billion-euro savings plan for Mercedes-Benz. He is responding to the company's sales crisis. (Image:Mercedes-Benz AG)

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