New Japanese car giant looks increasingly likely

Honda/Nissan New Japanese car giant looks increasingly likely

2025-01-03 Source: dpa 2 min Reading Time

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In Japan, the merger of Honda and Nissan is quickly becoming likely. Both companies made the start of merger talks official. Mitsubishi is still considering getting involved.

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)

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

Honda and Nissan, Japan's second and third largest car manufacturers, want to conclude negotiations by June 2025. Nissan's partner Mitsubishi Motors wants to decide by the end of January whether the Group will participate in a merger, the companies announced.

Honda and Nissan are considering a holding company in August 2026. Together, they would form the third-largest car company in the world with sales of more than eight million vehicles and move closer to Toyota and Volkswagen. They want to pool their resources in order 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 struggling in the Chinese market in particular, where sales have fallen significantly.

Cooperation known since March

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

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

Nissan under pressure—Group restructuring initiated

Nissan is under economic pressure. It was only in November that the company announced the reduction of around 9,000 jobs worldwide. Among other things, global production capacities will be reduced by 20 percent and management will be reorganized.

In addition, the group with around 134,000 employees lowered its forecast for the second time this year. The targeted operating profit for the current financial year was revised downwards from 500 billion yen to 150 billion yen (equivalent to around 905 million euros or approx. 932 million USD ).

Nissan is not the only car manufacturer in crisis. In recent months, a number of manufacturers and suppliers have announced large-scale job cuts, including VW, Bosch and Schaeffler. Mercedes-Benz has also announced cost-cutting measures. Volkswagen is also struggling with the tough competition on the Chinese market: The car manufacturer wants to cut more than 35,000 jobs by 2030 in a socially responsible manner. Contrary to fears, however, there will be no complete plant closures for the time being.

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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