Nissan, Honda announce merger, creating world’s third largest company | Business and Economic Affairs

The plans, which include Mitsubishi, have been announced as Japan tries to enter the electric car market.

Japan’s Honda and Nissan are planning a merger, which would create the world’s third largest company as the industry moves away from gasoline.

The two presidents of the company, Toshihiro Mibe from Honda and Makoto Uchida from Nissan, signed a cooperation agreement on Monday, revealing the establishment of the participating company in August 2026, which could place them third in the market after Toyota and Volkswagen.

Honda, currently Japan’s second-largest carmaker, is widely seen as the only national partner to rescue Nissan, which has struggled since former chairman Carlos Ghosn was arrested on charges of fraud and misappropriation of the company’s assets in 2018.

Ghosn, who denied the charges and fled to Lebanon after being released on bail, derided the planned merger as a “bad move” in a video call to reporters on Monday.

Nissan, worth about $10bn, said in November it was cutting 9,000 jobs, or 6 per cent of its global workforce, and reducing its global production capacity by 20 per cent after reporting a quarterly loss of 9.3 billion yen ( $60m).

But the merger, which would also include Nissan’s subsidiary Mitsubishi Motors, could result in a deal worth more than $50bn based on the market capitalization of all three carmakers.

Honda’s Mibe said the company, which is currently valued at more than $40bn, will begin to lead new management for the combined organisation.

The next gen

Japanese automakers are lagging behind their biggest rivals in electric cars and are trying to cut costs and make up for lost time.

The three companies, which announced in August that they will share electric vehicle (EV) components such as batteries and joint research software for autonomous driving, will build about 8 million vehicles.

In 2023, Honda produced 4 million and Nissan produced 3.4 million. Mitsubishi Motors has made over one million.

Sam Fiorani, vice president of AutoForecast Solutions, a global automotive expert, said Nissan’s experience in building batteries, electric vehicles and gas-electric hybrid powertrains could help Honda develop its own next-generation EVs and hybrids.

The merger of the two-tiered Japanese brands would mark the biggest reshaping of the global auto industry since Fiat Chrysler Automobiles and PSA merged in 2021 to form Stellantis in a $52bn deal.