Honda and Nissan are in talks to strengthen their partnership, with a potential merger being discussed. This is a major shift in Japan’s auto industry, which is facing intense competition from Tesla and Chinese companies. The two companies are looking for ways to cooperate on technology and possibly create a stronger competitor to Toyota, Japan’s largest automaker.
The discussions could lead to a holding company or even a full merger, which would make the combined company the third-largest auto group in the world, behind Toyota and Volkswagen. If Mitsubishi Motors, in which Nissan holds a 24% stake, is included, the merged group would stay in third place.
Analysts say a merger could help the Japanese auto industry compete better against global rivals like Tesla and Chinese automakers. Shares of Nissan rose significantly, while Honda’s shares declined.
Honda and Nissan are also exploring ways to collaborate on electric vehicle (EV) development, which has become a key focus due to growing pressure from EV price wars. Nissan has been struggling financially, while Honda is also facing challenges with its EVs and cash flow.
This merger would be a way for both companies to cut costs and improve their position in a changing market.